Healey requires local approval before Massachusetts permits any data center

Builders of data centers in Massachusetts have to get local approval. Gov. Maura Healey signed an executive order on Sept. 8 that precludes proposed data center projects from proceeding to state permitting unless approved by the town or city in which they are located.

The change furnishes municipalities across the Commonwealth with an early kill switch on an industry that many already distrust.

Six communities have already banned or paused the facilities

“Unless a community says yes to a data center, we’re saying no,” Healey said at a press conference at the State House. The order necessitates that developers negotiate community benefits agreements with their host towns first.

Those deals have to line up with state standards before any state permitting process can begin.

The order is for projects with a maximum electricity demand of greater than 25 megawatts. Developers must comply with the administration’s data center framework for permits to be issued.

The order also proscribes non-disclosure agreements between state agencies and data center companies, which Healey’s office said is intended to keep the review process open to residents.

Shutesbury and Holyoke have banned the facilities outright. Westfield has permitted a moratorium. Easthampton, Northampton, and Greenfield are weighing their own temporary bans.

Facilities over 25 megawatts also are required to generate their own power and guarantee it meets the state’s clean energy standards. Healey would prefer they make it onsite.

If this does not work, they can fund new generation nearby or pay into a newly created Ratepayer Protection Fund.

The state’s clean energy standard requires just a fraction of power to come from approved sources like wind, solar, and hydro that will increase to at least 40% by 2030. But the governor’s office said data centers will be held to a higher bar.

They call for clean generation to satisfy 100% of their electricity needs.

“We can’t have data centers coming in and taking energy away from the rest of us,” Healey said.

The Massachusetts Department of Environmental Protection has until Dec. 31 to create an alternative compliance payment mechanism for centers that don’t meet clean electricity standards.

That money goes to the Ratepayer Protection Fund.

Lowell residents saw electric bills climb more than 50%

In June Healey paused applications for a 20-year sales and use tax exemption on qualified data centers, an incentive she was quick to disown.

“The sales tax exemption was not my idea,” she told reporters, noting it was part of the Legislature’s economic development package she signed in 2024.

A lot of the local anger goes back to Lowell. A bill from state Sen. Vanna Howard, S 3166, contains guardrails similar to Healey’s framework.

Howard told colleagues that some residents near the Markley Group’s Lowell facility saw electric bills climb more than 50%, with exhaust reaching bedrooms and noise disrupting sleep.

In April, Lowell residents sued MassDEP over an air quality plan that would add generators to the site, and a Middlesex Superior Court judge recently obstructed four of the generators from being installed.

Massachusetts is the third state in as many months to turn up the heat. Texas Governor Greg Abbott took action in August to require new facilities to submit to audits by the state utility regulator and grid operator ERCOT.

New York paused construction of data centers 50 megawatts or larger in July. Fifteen states are considering moratoriums, the National Conference of State Legislatures says.

Modern AI data centers can run on a gigawatt or more, and in parts of the US, grid connections can take seven years or more, forcing operators to switch to onsite diesel and gas generation that adds to both costs and emissions. That is precisely the burden Healey says her order is designed to keep off ratepayers’ bills.

Marc Andreessen, Ben Horowitz, and Greg Brockman support a pro-AI super PAC called Leading the Future, which is running ads targeting voters in battleground states ahead of the midterms.

Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.