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Massachusetts Just Gave Towns a Veto Over Data Centers. Here’s What Developers Need to Know.

If you’re planning a data center in Massachusetts, one signature changed the order you have to do things in. On September 8, 2026, Governor Maura Healey signed an executive order with a simple rule. No local approval means no state permit. If a project doesn’t have local approval, state permitting agencies won’t advance it. As the Governor put it, “Unless a community says yes to a data center, we are saying no.”

Local buy-in used to be one of several things you managed alongside state and utility approvals. In Massachusetts, it now has to come first.

What the order requires

The rule applies to projects with peak electricity demand above 25 megawatts, which covers most commercial-scale builds. Those projects have to show they comply with the state’s Data Center Framework before they can get a permit.

Three requirements matter most for your budget and timeline.

The first is a community benefits agreement. You need a signed agreement with the host community that meets state standards before any state permitting starts. These agreements take time to negotiate, so the work has to begin early rather than at the end.

The second is that you pay for your own power. The framework expects developers to cover the full cost of the energy infrastructure and clean energy supply their project needs. A company that doesn’t bring its own clean energy instead pays a fee into a new Ratepayer Protection Fund, which is returned to customers.

The third is transparency. The order bars non-disclosure agreements between state agencies and data centers, so deal terms you might have expected to keep quiet will be public.

It’s worth being clear about what this isn’t. It isn’t a ban. Healey has declined to support a moratorium, unlike Maine’s governor, and argues the state needs data centers for its innovation economy. The message to developers is closer to “yes, if” than “no.”

How this compares nationally

Almost every state is now working through the same question. Who pays when a data center’s power demand hits the grid? Lawmakers across 31 states introduced 151 data center bills in 2025, more than triple the 2024 count, and another 264 in the first months of 2026. States have settled on different tools to answer that question, and the differences matter for where and how you build.

Most states have focused on electricity costs rather than siting. Ohio is the clearest example. Regulators there approved a tariff that requires large new data centers to pay for at least 85% of the energy they subscribe to each month, even if they use less, along with proof of financial viability and an exit fee if a project is canceled. Those terms run for 12 years, and regulators rejected an attempt by Amazon, Google, and others to undo them. Texas reached a similar result through legislation. Senate Bill 6, signed in June 2025, shifts interconnection costs onto large-load customers of 75 megawatts or more, and it lets the grid operator disconnect facilities remotely during emergencies, a provision critics nicknamed the “kill switch.”

Other states are moving more slowly, studying the problem before they act. California’s SB 57, signed in October 2025, directs regulators to assess whether data center demand is shifting costs onto other ratepayers. New Jersey’s Governor Sherrill signed a package in late 2025 meant to keep those costs off ratepayers’ bills, and Oklahoma advanced a bill to make new data centers pay for their own infrastructure.

A few states slowed things down entirely. New York became the first to freeze discretionary environmental permits statewide for data centers using 50 megawatts or more, pausing them until an environmental study is finished, which is expected to take about a year.

Against that backdrop, Massachusetts stands apart. Ohio and Texas decide who pays. New York decides when the state will even consider a project. Massachusetts hands the decision to the town. The closest parallel is a citizen-filed Massachusetts ballot initiative that would require approval by two-thirds of local voters, which itself follows a similar Ohio proposal. No other state has made local consent a hard precondition for state permitting through an executive order.

Where to focus

For your Massachusetts pipeline, community engagement is now the first piece of work, not the last. The benefits agreement and the clean-energy commitment aren’t conditions you satisfy at closing. They’re what gets you in the door. Put the ratepayer fee in your energy budget as a real line item, and assume your terms will become public.

The wider pattern is consistent. Whether a state uses rates, studies, permitting pauses, or local votes, they’re all converging on the same principle. The developer, not the ratepayer, pays for the new demand. They differ on the method, not the goal. If your site-selection model still assumes communities and ratepayers will absorb your infrastructure costs, that assumption is fading fast.

The developers who move fastest now will be the ones who show up early, bring their own power, and treat the host community as a partner rather than an obstacle.

Sources

David J. Murphy is the Managing Attorney of Murphy PC, a Boston-based real estate and business law firm, and is Of Counsel to McDermott, Quilty, Miller & Hanley LLP. With over 20 years of experience, David counsels developers, sponsors, owners, and investors in commercial real estate transactions throughout New England and other states, with a focus on joint ventures, preferred equity, and complex deal structuring. He can be reached at dmurphy@murphypc.com or 617.993.0650.

This article is for general informational purposes only. It is not legal, financial, or investment advice and does not create an attorney-client relationship. Consult a licensed attorney before acting on anything discussed here. This may constitute attorney advertising.