MA Governor's Order Makes Data Centers Subject To Local Approval

Proposed data centers must secure a community benefits agreement and either provide for or pay for their own energy consumption as part of an executive order that Gov. Maura Healey said on Tuesday allows local control over the controversial developments.

The executive order aims to make sure that cities and towns have a say in whether a data center is built in their communities and a means to offset the potential costs of higher utility and water consumption costs from their construction and operation.

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Healey's order signed on Tuesday states that if a data center doesn't have local approval, state permitting agencies will not advance the project.

"Unless a community says yes to a data center, we are saying no," she said in a statement. "We're giving communities a voice and laying out the rules for what needs to happen in Massachusetts.

"I'm also making sure these data centers use clean energy, and that we protect people from higher energy costs — including by returning money directly back to ratepayers."

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Under the energy stipulation, data centers must display that they are either bringing their own energy supply through clean energy methods, or compensate cities and towns for the energy usage through what she calls a "Ratepayer Protection Fund."

"Data centers can afford to pay for their own clean energy and infrastructure, and we’re going to make sure they do," Energy and Environmental Affairs Secretary Rebecca Tepper.

Data centers will need a community benefits agreement — essentially an outline of contributions to the hosting community — before moving forward with state permitting.

Healey said she is also prohibiting the use of non-disclosure agreements between state agencies and data centers to ensure a transparent and fair approval process.

She called the permitting framework "one of the most comprehensive in the nation."

She said the order directs the state's permitting agencies to require proposed data center projects with peak electricity demand exceeding 25 megawatts to demonstrate they are in compliance with the governor’'s framework before granting their permits.

"A data center should invest in Massachusetts – bringing new clean energy and paying for the infrastructure to get it there," Tepper said. "And if not, they need to be accountable to ratepayers. We've seen ratepayers in other states foot the bill for data centers.

"That won't be acceptable in Massachusetts."

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