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Data center regulations in Massachusetts

Graded Moderate and tightening. 7 laws, orders, rulings and local actions, each with its source, reviewed 23 October 2026.

Reviewed 23 October 2026 · Part of the Data Center Rulebook

Tax break paused; permits above 25 MW need community agreement

Moderate↑ TighteningGrid: ISO-NE7 items
5in force
2pending
0local pauses
paused or sunsettax break
2.8combined index (5 most)
20.0cper kWh, industrial
23 October 2026reviewed
Regulation3.4 / 5
  1. Grid connection4

    Executive Order 658 (8 Sep 2026) makes projects above 25 MW supply new clean energy equal to their use from day one or pay until they can.

  2. Power rates2

    Order 658 (8 Sep 2026) tells the utility regulator to design large-load rates that keep upgrade costs off other customers, but no rate or term exists yet.

  3. Siting and land use4

    Order 658 (8 Sep 2026) bars state permits above 25 MW without a community benefits agreement statewide; Holyoke banned new data centers and Lowell is paused.

  4. Tax treatment4

    The governor paused new qualified data center certifications on 26 Jun 2026 with no end date, so the 20-year sales tax exemption is closed to new awards.

  5. Permits and water3

    Order 658 (8 Sep 2026) bars agencies from signing NDAs, and a court blocked more Markley diesel generators on 10 Aug 2026; water rules are still due.

Scored on rules in force, 1 to 5. 5 is the most regulated. Pending rules set the arrow.

The 2024 economic development law created a 20-year sales and use tax exemption for qualified data centers, but on June 26, 2026 Governor Healey stopped new certifications until standards on energy, water and community impact are in place. Executive Order 658, signed September 8, 2026, bars state permits for data centers above 25 MW unless the developer follows the state framework and files a community benefits agreement, and it requires clean energy matching and new large-load rates. Holyoke became the first Massachusetts community to ban new data centers by zoning, Lowell has a temporary local moratorium and a court has blocked extra diesel generators at the Markley site there, and Everett is weighing an ordinance that would cap new data centers at 5 MW.

Outlook for the next year

The environmental agency must set the alternative clean energy payment mechanism by December 31, 2026 and the state owes towns further siting guidance by year end. The utility regulator still has to design the large-load rates, and the administration's Mass Wins economic bill, which carries the June 2026 framework, is the likely route for putting the rules into statute. Everett's council outcome on the 5 MW ordinance, due for debate on May 26, 2026, has not been confirmed, and residents' challenge to the Markley air approval in Lowell continues under the August 10, 2026 Superior Court order. The governor faces Republican candidate Mike Minogue on November 3, 2026.

Does Massachusetts have a data center moratorium in force?

No. As of 23 October 2026 no statewide or local moratorium on data centers is in force in Massachusetts. Proposals and expired pauses are not counted.

Is Massachusetts tightening or loosening its rules on data centers?

Tightening. Massachusetts is graded Moderate, which means incentives alongside new costs, limits or local pushback. Tax break paused; permits above 25 MW need community agreement. The outlook above says what is pending.

Which grid operator covers Massachusetts?

Massachusetts sits in ISO-NE. The grid operator decides how a new large load is studied, what it must bring or pay, and whether it can be curtailed first; the state decides siting, permits, tariffs and incentives.

Has Massachusetts cut its data center tax incentive?

Yes. Massachusetts has paused, narrowed or ended a data center incentive in 2025 or 2026: Pause on data center tax incentive certifications.

How regulated are data centers in Massachusetts?

On Genloop's five-line rubric (1 least regulated, 5 most) Massachusetts scores grid connection 4, power rates 2, siting and land use 4, tax treatment 4, permits and water 3, a mean of 3.4. The most regulated line is tax treatment: The governor paused new qualified data center certifications on 26 Jun 2026 with no end date, so the 20-year sales tax exemption is closed to new awards.

Every item, newest first

7 items: each is a law, order, tariff, ruling, utility action or local decision that changes what a data center must do, pay or disclose, or where it may be built. Failed and pending measures are marked. Each links to its source.

  1. ExecutiveSep 2026siting and zoningIn force

    Executive Order 658: permit conditions above 25 MW

    Signed September 8, 2026. State agencies may not permit a data center built or expanded after that date with peak demand above 25 MW unless it conforms to the June 2026 state framework and submits a community benefits agreement reviewed by the environmental justice office. Agencies may not sign nondisclosure agreements. There is no grandfathering clause.

    Source: bdlaw.com
  2. ExecutiveSep 2026on-site powerApproved, not yet effective

    Executive Order 658: clean energy matching and large-load rates

    Covered projects must supply new clean energy equal to their use from day one or make payments until they can, under a mechanism the environmental agency must set by December 31, 2026. The utility regulator must design large-load rates so other customers do not pay for data center upgrades.

    Source: boston25news.com
  3. CourtLowellAug 2026air permitsIn force

    Markley generators blocked; city moratorium

    On August 10, 2026 a Superior Court judge temporarily blocked four more backup diesel generators at Markley Group's data center while residents challenge the state air approval. Lowell also has a temporary moratorium on new or expanded data centers while it writes zoning standards.

    Source: bdlaw.com
  4. ExecutiveJun 2026incentivesIn force

    Pause on data center tax incentive certifications

    On June 26, 2026 the governor paused new qualified data center certifications, which unlock the sales and use tax exemption, until protections on energy cost, water and community impact are in place. No end date was given.

    Source: news.bloomberglaw.com
  5. LocalHolyokeJun 2026siting and zoningIn force

    Holyoke bans new data centers by zoning

    Holyoke's City Council amended its zoning to ban new data centers, the first Massachusetts community to do so (reported by WBUR in September 2026; the vote is understood to have been in June 2026). The ordinance carves out the existing Massachusetts Green High Performance Computing Center, which is permitted to draw up to 12 MW from the grid and currently uses less.

    Source: wbur.org
  6. ExecutiveJun 2026on-site powerPending

    June 2026 state data center framework and Mass Wins bill

    Released with the pause: developers should bring clean energy for 100 percent of demand, avoid local water scarcity, limit air and noise pollution and not add costs to municipal systems. The administration put data center policy into its Mass Wins economic bill, which is pending.

    Source: hoodline.com
  7. LocalEverettMay 2026siting and zoningProposed

    Proposed data center zoning ordinance

    Everett's planning and development board voted unanimously in April 2026 for an ordinance allowing a data center on part of the 105-acre former ExxonMobil site only if it is no larger than 20,000 square feet and 5 MW, uses closed-loop non-potable cooling, keeps a 200-foot setback with noise monitoring, runs on renewable power over an owner-funded line and has no diesel backup. The Davis Companies, part of the Everett Landco joint venture, told the council the size cap 'effectively represents a full ban'. The City Council was to take it up on 26 May 2026; the outcome was not confirmed.

    Source: bostonglobe.com

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