Massachusetts orders data centers to bring their own clean power

Massachusetts Gov. Maura Healey has signed an executive order requiring developers of data centers larger than 25 megawatts of peak demand to provide their own clean power or pay into a ratepayer protection fund, making the state the third in as many months to rein in data center development. Healey would prefer that developers generate the clean power onsite; if they do not, they must fund construction of new generation nearby or pay into the ratepayer fund, according to the order. The state is also directing communities to avoid signing non-disclosure agreements with developers.

The order pauses applications for a data center sales tax exemption that took effect last month, giving regulators time to implement the new restrictions. The clean power commitment may be less stringent than it appears: Healey said data centers must meet the Massachusetts clean energy standard already enshrined in state law, which requires only a portion of their power to come from approved sources such as wind, solar, and hydro. In 2030, for example, those sources must contribute at least 40% of the total, a figure that varies by year and ratchets up over time.

The move is the latest turn in a fast reversal of state policy toward data centers. Just a few years ago, tech companies and developers were showered with incentives to locate facilities in particular states. Now they face a groundswell of public opposition as politicians seek to show voters they are addressing concerns about power demand and grid strain. In August, Texas Gov. Greg Abbott announced that all new data centers in the state must submit to audits by the public utility commission and the grid operator, ERCOT. In July, New York's governor stopped construction of new data centers of 50 megawatts or larger.

TechCrunch was unable to reach Healey's office before publication for comment on the order's details or timeline. The executive order does not specify how quickly the clean power requirements will be phased in beyond the state's existing annual clean energy standard schedule.

With public sentiment shifting against data centers, the tech industry is starting to push back. The pro-AI super PAC Leading the Future, funded by Marc Andreessen, Ben Horowitz, and Greg Brockman, is buying ads aimed at swaying voters in battleground states ahead of the midterm elections, an early sign of the industry's political response to the regulatory wave.

What remains unclear is how the Massachusetts rules will interact with the sales tax exemption pause, how the ratepayer protection fund will be structured and administered, and whether other states will follow with similar self-supply mandates. The pattern across Texas, New York, and now Massachusetts suggests state-level scrutiny of data center power use is becoming a defining issue for the AI buildout.