Massachusetts Sets New Clean Power Rules for Large Data Centres

Massachusetts is imposing new clean-energy requirements on large data centres, requiring qualifying projects to secure enough clean electricity to cover their power demand or contribute toward protections for electricity customers.

Gov. Maura Healey’s order applies to data centres with peak demand above 25 megawatts. Developers will be expected to follow the state’s “Bring Your Own Clean Energy” approach, which calls for projects to supply, procure or fund the electricity resources needed for their operations without shifting additional costs to existing ratepayers.

Large data centres must cover their power demand

Massachusetts would prefer developers to generate clean electricity on-site. Projects that cannot do so can support new clean generation capable of serving the region or pay into a ratepayer protection fund intended to address costs associated with growing data centre electricity demand.

The state says qualifying data centres will need clean generation sufficient to cover 100% of their electricity demand. That goes beyond the percentage requirements that apply under Massachusetts’ broader Clean Energy Standard within its air pollution regulations, which increases clean-energy requirements over time.

The order also encourages greater transparency between developers and local communities, including directing communities to avoid non-disclosure agreements related to data centre projects. Massachusetts has also paused applications for its data centre sales tax exemption while regulators implement the new requirements.

States tighten oversight of data centre growth

Massachusetts joins other states that have recently moved to place tighter conditions on large data centre development. Texas announced additional oversight for new projects in August, including audits involving the state utility regulator and grid operator ERCOT.

New York took a different approach in July by stopping construction of new data centres with capacity of 50 megawatts or more. The measures reflect growing pressure on state officials to address concerns about electricity demand, infrastructure costs and the effects of rapid data centre expansion.

The technology industry is also responding politically. Leading the Future, a pro-AI super PAC funded by technology figures including Marc Andreessen, Ben Horowitz and Greg Brockman, has begun buying advertisements aimed at voters in battleground states ahead of the midterm elections.

Massachusetts’ framework makes clean electricity supply a direct part of the approval environment for large data centres, while seeking to prevent the cost of serving those facilities from being transferred to households and other electricity customers.