Data Center Restrictions on Energy Costs Spread to Massachusetts

Massachusetts Governor Maura Healey has issued an executive order imposing new restrictions on data center developers, joining a trend of state officials nationwide clamping down on these facilities due to energy and environmental concerns. The order, signed on Tuesday, mandates that data center companies secure local support through community benefits agreements before receiving state permits and prohibits non-disclosure agreements between state agencies and developers.

Under the new regulations, data centers will be required to fund their own clean energy and infrastructure or contribute to a "ratepayer protection fund" to mitigate energy bill increases for residents. Additionally, developers must demonstrate that their projects will not adversely affect local water supplies or create environmental hazards. Governor Healey characterized the order as a proactive framework for guiding future development, emphasizing community control over data center siting.

This move by Massachusetts mirrors actions taken by other states, including Pennsylvania, New Jersey, and New York, where Democratic leaders have responded to public discontent. New York Governor Kathy Hochul previously signed a one-year moratorium on data center construction. Similarly, governors in Pennsylvania and New Jersey have issued executive orders mandating energy usage transparency and disclosure. The issue is not limited to "blue states"; Texas Governor Greg Abbott is requiring audits of data centers connecting to the electric grid, and Florida Governor Ron DeSantis has enacted legislation granting local communities the right to reject data center proposals.