Massachusetts Requires Data Centers To Get Local Approvals in Latest Clampdown

Massachusetts Gov. Maura Healey has signed an executive order to prevent data centers from seeking state-level approvals without local support.

Healey's new order prevents data centers over 25 megawatts from seeking state permits unless they have local approvals. She also directed the state's agencies to enforce a framework she announced this summer requiring the developments to have a clean energy supply, water resources, and community feedback before advancing.

It's the latest effort as lawmakers try to rein in the fast-growing data center industry nationwide. Thousands of new data center proposals have brought impacts on the housing market and energy prices. They've also emerged as a midterms flashpoint, as political parties try to contend with how to regulate the industry.

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

A poll from NBC News released this week found 69% of respondents oppose the construction of data centers in their local area. Democrats and independents are notably more opposed than Republicans.

The governor also prohibited nondisclosure agreements between state agencies and data center developers, in favor of transparency.

Tech investor Kevin Xu tracked three active moratoria on data center development in Massachusetts, including Lowell, Westfield, and Holyoke. Four other areas are considering them.

Data center debate

Specifically, data centers must now secure a community benefits agreement, a type of plan created for large energy projects. These outline how the developer will engage with local communities while they build and operate the data centers.

They also require a negotiated agreement that lays out anticipated impacts on that locality and what benefits its gains from the project. Only when one is in place will the state begin reviewing permits.

But the state wants only to add guardrails to the data center developments, not halt them entirely, Healey said.

Chrissy Lynch, president of the Massachusetts AFL-CIO, said in a statement that data center construction in the nation supports tens of thousands of union jobs.

"We need rules to ensure that these data centers support union jobs for local people, that they provide their own water and energy, that they pay their fair share of taxes, and that they work with local communities to ensure that the economic benefits are truly felt by those communities," Lynch said.

Republican Mike Minogue, who is challenging Healey for governorship this fall, criticized her prior stance. The state previously had a data center sales tax exemption that allowed data center operators to buy servers and other equipment. But Healey paused that exemption for new projects in June.

"Maura Healey rolled out the red carpet for data centers," Minogue said in a Facebook post. "They got tax breaks on the backs of hard-working Massachusetts families. Now she wants to re-write history because she's up for re-election."