Massachusetts hits data centers with new clean power rules
Massachusetts will require data centers exceeding 25 megawatts to secure 100% clean electricity or fund new generation, increasing regulatory and potential cost pressures as political opposition to expansion grows.
Massachusetts has become the third state in as many months to restrict data center development, introducing rules that could reshape project economics for technology companies and developers. Governor Maura Healey’s September 9, 2026, executive order requires facilities larger than 25 megawatts of peak demand to bring their own power and ensure it meets Massachusetts’ clean energy requirements. Healey prefers on-site clean generation. Otherwise, developers must fund new generation nearby or pay into a ratepayer protection fund. The requirement exceeds the state’s existing clean energy standard. That law permits industry to source a portion of its electricity from approved resources, including wind, solar and hydro. In 2030, those sources must provide at least 40% of total power, with the percentage rising over time. The governor’s office clarified that data centers must instead meet 100% of their electricity demand with clean energy generation. Massachusetts is also directing communities to avoid signing non-disclosure agreements. To give regulators time to implement the restrictions, Healey is pausing applications for a data center sales tax exemption that took effect last month. For investors, the order signals a shift from the incentives previously used to attract technology companies and data center developers. Requirements to procure or build clean generation could increase capital costs, complicate project timelines and intensify power-supply risks. Public opposition is growing as politicians respond to concerns about electricity demand, infrastructure and ratepayer costs. The policy follows Texas Governor Greg Abbott’s August announcement that all new Texas data centers must submit to audits by the public utility commission and grid operator ERCOT. In July, New York’s governor stopped construction of new data centers at least 50 megawatts in size. The technology industry is beginning to push back. Pro-AI super PAC Leading the Future, funded by Marc Andreessen, Ben Horowitz and Greg Brockman, is buying advertisements aimed at voters in battleground states ahead of midterm elections. Data center expansion remains a major AI catalyst, but access to power, clean-energy compliance and political resistance are becoming increasingly important investment risks.