On September 8, 2026, Massachusetts Governor Maura Healey issued Executive Order 658: Establishing Requirements for Responsible Data Center Development and Operations in Massachusetts to Protect and Support Ratepayers, Communities, and the Environment (the “Order”).
Through the Order, Governor Healey implemented permitting and regulatory standards for Massachusetts data centers that exceed 25 MW of peak electricity demand. The Order references and incorporates elements of the Healey Administration’s previously issued Statement of Expectations for Responsible Data Center Development and Operations in Massachusetts released on June 25, 2026 (the “Framework”).
The Framework provided initial guidance for data center developers seeking sales and use tax exemptions and addressed energy supply, energy efficiency, air quality, water use, coordination with labor, community benefits, economic development and project transparency.
The Order incorporates and expands on the Framework and allocates responsibilities to various state agencies:
- Permitting conditions: Permitting agencies may not issue permits to qualify data center projects unless the applicant demonstrates conformance with the Framework (expanding the use of the Framework from a focus on sale and use tax exemptions to general permitting) and submits a community benefits agreement reviewed by the Office of Environmental Justice and Equity (“OEJE”). Non-disclosure agreements with permitting agencies are prohibited except as otherwise provided by law, and agencies must amend existing regulations to align with the Framework;
- Rate Schedules: The Department of Public Utilities (“DPU”) is directed to prioritize finalization of large load rate schedules (per Executive Order 654) to ensure that other ratepayers don't bear grid upgrade costs from data center demand;
- Interconnection queues: DPU should direct Electric Distribution Companies to use fees, deposits, or similar requirements to avoid speculative data center projects and protect resources for other projects related to, for example, housing, businesses, distributed energy;
- Clean energy procurement: The Massachusetts Department of Environmental Protection (“MassDEP”) must develop protocols ensuring qualifying data centers procure sufficient incremental clean electricity meeting Massachusetts Clean Energy Standard requirements, and establish an alternative compliance payment mechanism funding a Ratepayer Protection Fund for non-compliant projects by December 31, 2026;
- Greenhouse Gas Emissions: The Executive Office of Environmental Affairs (“EEA”) and MassDEP must evaluate data center greenhouse gas emissions through the Clean Energy and Climate Plan and related regulations/programs;
- Water protection: MassDEP must develop protocols related to the protection of water resources and treatment of wastewater;
- Reporting: EEA must establish annual reporting/disclosure guidance consistent with the Framework; applicants must attest to future compliance when seeking permits;
- Municipal guidance: EEA and the Executive Office of Economic Development (EOED) must publish a Municipal Guidance Document by December 31, 2026, developed with broad stakeholder input, to help municipalities evaluate data center proposals;
- Agency cooperation: All state departments/agencies must support implementation and assist municipalities evaluating projects;
- Labor practices: Agencies should encourage project labor agreements, labor peace agreements, local hiring, training, safe conditions and fair wages; and,
- Annual reporting: EEA, EOED, and the Executive Office of Technology, Service and Security (EOTSS) must report annually to the Governor starting September 2027 on policy developments affecting data centers and stakeholder coordination.
The approach in Massachusetts follows recent actions in other states including Maine, where a moratorium proposal was narrowly defeated on the Governor’s desk; New York, where a one-year moratorium was recently enacted; and Texas, where a moratorium was enacted to enable regulators to complete audits of existing projects under development. Many, including former Energy Secretary Granholm, have praised the Order. However, others have pointed out that the practical impact in the Bay State may be minimal given that long interconnection queues, high energy costs and limited land availability make it unlikely that Massachusetts will face much development pressure irrespective of some of the new guardrails.
Sheppard will continue to monitor developments in the data center space.