Massachusetts Shifts the Power Bill to the Hyperscalers

For years, data center developers enjoyed a honeymoon period of state-sponsored incentives. Now, Massachusetts is flipping the script.

As TechCrunch first reported, Gov. Maura Healey has issued an executive order targeting data centers with peak demand exceeding 25 megawatts. The mandate is clear: these facilities must bring their own power and ensure it meets state clean energy requirements. While the general state standard requires a percentage of power from sources like wind, solar, and hydro—reaching 40% by 2030—the governor's office clarified that data centers must meet 100% of their electricity demand with clean energy generation.

From a capital expenditure perspective, the mechanism is a direct transfer of cost. Developers must either generate clean power onsite, fund the construction of new nearby generation, or pay into a ratepayer protection fund. By forcing developers to shoulder these costs, Massachusetts is effectively ensuring that the AI gold rush doesn't leave local utility customers paying for the grid upgrades required by hyperscalers.

Healey is further tightening the screws by pausing applications for a data center sales tax exemption that began last month and directing communities to avoid signing non-disclosure agreements.

Massachusetts is not alone in this regulatory pivot. TechCrunch reports that Texas Gov. Greg Abbott recently required new data centers to undergo audits by the grid operator ERCOT and the public utility commission, while New York's governor halted construction of facilities 50 megawatts or larger in July.

As politicians respond to growing public opposition, the industry is fighting back. TechCrunch notes that the pro-AI super PAC Leading the Future—funded by Greg Brockman, Ben Horowitz, and Marc Andreessen—is currently purchasing ads in battleground states to influence voters ahead of the midterm elections.