Healey signs executive order requiring new data centers to get local approval before development

Governor Maura Healey signed an executive order Tuesday that bars state agencies from issuing permits to large data center projects unless the developer has first received approval from the community, the latest step to rein in an industry that has drawn mounting local opposition across Massachusetts.

The order applies to data centers with peak electricity demand above 25 megawatts. Under its terms, the state cannot advance permits for those projects unless developers show they meet the state’s Data Center Framework and have filed a community benefits agreement with their host community. The order also forbids state agencies from entering into non-disclosure agreements with data center developers.

The order makes one exception to the 25-megawatt threshold: the Secretaries of the Executive Offices of Energy and Environmental Affairs and Economic Development can jointly exempt data centers from the threshold if they are tied to accredited colleges, universities, medical care providers, or state-sponsored programs.

“Unless a community says yes to a data center, we are saying no,” Healey said in a statement announcing the order. 

A fund to shield ratepayers

At a State House news conference Tuesday, Healey said the order does three things: gives communities a formal voice in whether projects move forward; requires developers to pay for their own clean energy and infrastructure, or contribute to a fund that offsets costs for other ratepayers; and forces companies to prove their projects won’t harm local water supplies, air quality, or public health.

“We’re putting communities in the driver’s seat here, and we’re laying out the rules so that there’s clarity and there’s certainty when it comes to data center development,” Healey said.

The order directs MassDEP to establish, by the end of 2026, an “alternative compliance payment” mechanism for data centers that fail to produce enough new clean electricity to cover their own consumption. Money collected through the ACP mechanism would flow into a newly created Ratepayer Protection Fund, which the administration says will be used to alleviate electricity supply costs for all customers.

Healey said she wants companies to arrive with their own power supply already lined up from the start.

“And if they can’t, then they’re going to need to pay ratepayers for the energy that they consume until their own supply is in place,”she said at the news conference.

Water, air, and labor standards

Beyond the community benefits requirement, the order tasks MassDEP to create protocols for data centers to follow on water use, wastewater, and stormwater compliance.

State agencies are also directed to encourage developers to use “responsible labor practices” such as project labor agreements, hiring locally, and offering apprenticeship programs.

Massachusetts AFL-CIO President Chrissy Lynch said in the release that “every job related to data centers … should be a union job. We need rules to ensure that these data centers support union jobs for local people.”

Healey’s order follows her decision in June to suspend the state’s sales-tax exemption for the developments, and amid a wave of local resistance.

Westfield and Lowell have each adopted one-year moratoriums on new data centers, and Holyoke‘s town government has gone further, banning them outright. In Lowell, neighbors have sued over the state’s approval of an air-quality permit allowing the addition of eight diesel backup generators. A judge blocked installation of four of them last month. And in Western Massachusetts, a West Springfield resident took it upon himself to file a citizen’s petition to regulate data centers statewide.

Healey framed the order as an attempt to get ahead of a fast-moving industry before it becomes too difficult to regulate.

“We need to act now, before these projects become widespread and before it becomes far harder to protect our communities, our electric grid, and our environment,” she said.

Annie Jonas is a Community writer at Boston.com. She was previously a local editor at Patch and a freelancer at the Financial Times.