Massachusetts has emerged as the latest state to mandate that data centers generate their own power, introducing a significant policy shift. According to the new mandate, developers constructing data centers exceeding 25 megawatts in capacity must either secure clean energy sources or contribute to a ratepayer protection fund.
Governor Maura Healey’s executive order highlights a broader trend where states are reevaluating their relationship with data centers. While technology firms and developers previously received generous incentives to establish operations, they now face a growing groundswell of public opposition as politicians strive to demonstrate that they are responding to voter concerns.
Under this order, facilities with a peak demand greater than 25 megawatts are required to secure their own power supply that meets the state’s clean energy standards. The governor prefers that this power be generated onsite, but failing that, operators must finance the construction of new generation capacity nearby or pay into the designated ratepayer protection fund.
The executive order also instructs communities to refrain from signing non-disclosure agreements. To allow regulators adequate time to implement these new restrictions, the governor has paused the processing of applications for a data center sales tax exemption that was enacted just last month.
However, the clean power commitment may not be as strict as it initially appears. Governor Healey clarified that data centers are required to meet the Massachusetts clean energy standard already established in state law, meaning they only need to generate a specific portion of their electricity from approved sources such as wind, solar, and hydro. For instance, these sources must provide at least 40% of the total power by 2030, with the requirement increasing annually.
TechCrunch was unable to reach Governor Healey’s office prior to publication.
With these new regulations, Massachusetts becomes the third state to rein in data center development over the past three months.
Following Massachusetts' lead, Texas Governor Greg Abbott announced in August that all new data centers must undergo audits by the public utility commission and grid operator ERCOT. Additionally, New York’s governor halted construction on new data centers of 50 megawatts or larger in July.
As public sentiment shifts against data centers, the technology industry is beginning to push back. The Pro-AI super PAC "Leading the Future," backed by Marc Andreessen, Ben Horowitz, and Greg Brockman, has begun purchasing advertisements aimed at influencing voters in battleground states ahead of the midterm elections.
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