Massachusetts Tightens Data Center Environmental Permitting

Massachusetts Governor Maura Healey signed Executive Order 658 on September 8, implementing new environmental and community-benefit requirements for large data center projects. This order directs state permitting agencies, including the Massachusetts Department of Environmental Protection (MassDEP), the Massachusetts Environmental Policy Act Office, and the Energy Facilities Siting Board, to withhold permits for new or expanded data centers exceeding 25 megawatts unless developers comply with a responsible-development framework and submit a community benefits agreement.

The framework, initially released on June 25, covers critical areas such as electricity costs, water usage, air quality, noise, public health, and community impacts. The new executive order elevates these expectations by directly linking them to permitting decisions. MassDEP is now tasked with developing specific protocols for water quality and quantity protection, as well as requiring projects to procure incremental new clean electricity generation to offset their annual consumption or face an alternative compliance payment that will fund a new Ratepayer Protection Fund. The Department of Public Utilities is also continuing work on large-load rate schedules to prevent other ratepayers from subsidizing data center distribution upgrades.

Additionally, covered data centers must submit a community benefits agreement aligned with standards from the Massachusetts Office of Environmental Justice and Equity, consulting with the office before filing. State permitting agencies are also barred from using nondisclosure agreements with data center projects. The order signifies a growing trend among states to integrate electricity, water, and community impacts into a unified development framework, though implementation details for MassDEP's protocols and municipal guidance are still pending by December 31, 2026.