Maura Healey, the governor of Massachusetts, issued an executive order on September 8 establishing new requirements for data center development in the state, as reported by rtoinsider.com. The directive targets facilities with a peak demand exceeding 25 megawatts and mandates that developers either secure new clean electricity generation to cover their annual consumption or contribute financially to a ratepayer protection fund. State agencies are prohibited from initiating permitting processes until local communities grant approval and developers sign host community benefit agreements that meet state standards.
What it means
The executive order reinforces a framework Healey announced on June 25 regarding the economic and environmental impacts of data centers. Under the new rules, state agencies cannot enter into nondisclosure agreements with developers, ensuring transparency in negotiations. The Department of Public Utilities is directed to prioritize large load rate schedules designed to shield other ratepayers from infrastructure costs associated with these facilities. Additionally, the DPU should instruct electric distribution companies to remove speculative data center projects from interconnection queues.
Massachusetts has not emerged as a primary hub for data centers largely due to high electricity costs. The U.S. Energy Information Administration ranked New England’s industrial electricity prices as the highest among the contiguous 48 states in 2024, with Massachusetts holding the second-highest average industrial electricity prices in the region. Residential rates in Massachusetts averaged 29.35 cents per kilowatt-hour in 2024, compared to a nationwide average of 16.48 cents. Local opposition has already influenced development timelines; Westfield city leaders enacted a one-year moratorium on a proposed facility that would have been the largest in New England, while residents of Lowell are opposing an expansion of the state’s largest data center due to concerns over noise and emissions from emergency generators.
The order requires developers to protect local environments, water systems, and public health. It also mandates that job creation and benefits be accessible to local businesses and residents. State entities will encourage the use of responsible labor practices, including project labor agreements, apprenticeships, and fair wages. Massachusetts previously stopped accepting requests for sales tax exemptions on data center projects pending stronger development protections.
Key facts
- Executive order issued September 8 by Gov. Maura Healey
- Applies to data centers with peak demand over 25 MW
- Developers must procure new clean energy or pay into a ratepayer protection fund
- State agencies barred from permitting without local approval and benefit agreements
- Nondisclosure agreements between state agencies and developers prohibited
- DPU directed to shield ratepayers from infrastructure costs and clear speculative projects from queues
- Massachusetts residential electricity price averaged 29.35 cents/kWh in 2024
- Nationwide average residential electricity price was 16.48 cents/kWh in 2024
Source: rtoinsider.com, reporting Massachusetts executive order