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Massachusetts tightens data center rules, adding local veto power

The executive order covers projects of 25 megawatts or more, requiring community benefit agreements and new cost coverage for grid upgrades or payments into a ratepayer protection fund.

Reported · Written up by our desk · Industry

Massachusetts Gov. Maura Healey signed an executive order that adds new hurdles for developers seeking to build data centers in the state, aiming to limit impacts on the electrical grid and the environment. While it stops short of an outright moratorium, the order requires developers to negotiate with local communities before obtaining state permits and expands local oversight of new projects.

Under the order, state agencies cannot issue permits or authorizations for data center projects of 25 megawatts or more unless developers reach a community benefit agreement with the host municipality. The rules are designed to give municipalities stronger leverage over whether projects move forward.

Industry leaders told Bisnow that the new burden is likely to keep most large developers out of Massachusetts in the short run. Bisnow also reports that the state has largely missed the nationwide data center construction boom, with only one large-scale project reportedly in the planning stages.

The order comes after the Healey administration stopped accepting applications for the state’s data center sales tax exemption, and it adds financial requirements tied to the amount of power data centers require. Developers will need to cover costs associated with delivering that power, or they must pay into a ratepayer protection fund intended to prevent grid upgrade costs from being passed along to other electricity customers.

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