Massachusetts mandates clean power for large data centers or payment into ratepayer protection fund

Massachusetts became the latest state to force data centers to bring their own power, but this time there’s a twist. A new state mandate would require developers building data centers larger than 25 megawatts to provide clean power or pay into a ratepayer protection fund.

Gov. Maura Healey’s executive order is the latest example of states turning against data centers. Just a few years ago, tech companies and data center developers were showered with incentives to locate facilities in a particular state. Now, they’re fighting a groundswell of public opposition as politicians seek to show voters they’re addressing their concerns.

Under Healey’s order, data centers larger than 25 megawatts of peak demand will have to bring their own power and guarantee that it adheres to the state’s clean energy requirements. Healey would prefer that they generate the clean power onsite, too. If not, they’ll need to fund the construction of new generation nearby or pay into a ratepayer protection fund.

Massachusetts is also directing communities to “avoid signing non-disclosure agreements,” according to the executive order. To give regulators time to implement the new restrictions, the governor is pausing applications for a data center sales tax exemption that went into effect last month.

The clean power commitment might not be as stringent as it sounds, though. Healey said data centers must meet the Massachusetts clean energy standard enshrined in state law, which means they will only have to generate a portion of their power using approved sources like wind, solar, and hydro. In 2030, for example, those sources must contribute at least 40% of the total. The amount varies by year, and it ratchets up over time.

TechCrunch was unable to reach Healey’s office prior to publication.

With the new restrictions, Massachusetts becomes the third state in as many months to rein in data center development.

In August, Texas Gov. Greg Abbott announced that all new data centers in the state would need to 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 50 megawatts or larger.