State lawmakers have proposed a legislative change that would hold data centers responsible for their environmental and financial impact on communities, as developers continue to eye Massachusetts as an ideal location.
The proposed amendment, part of the state Senate’s affordability package, S.3143, which passed in a 32-8 vote last week, comes as state and federal lawmakers grapple with mounting data center proposals.
“It is difficult to go out in one of the communities I represent right now and someone doesn’t bring up the conversation of data centers,” said state Sen. John Velis, D-Westfield.
The data center debate landed in Velis’ district last month when the Holyoke City Council banned any artificial intelligence (AI) data center development over 12 megawatts, after a 20-megawatt data center along the Connecticut River at 100 Water St. was proposed.
Many residents in the Paper City and neighbors rallied against the data center proposal, with concerns ranging from water pollution and strains on Holyoke’s electrical supply to potential noise pollution and fears that such centers could be used as part of a “fascist” tactic to harvest personal data.
Other communities are adopting or working on moratoriums for data centers. The Westfield City Council approved a one-year ban at its meeting Monday night, and Greenfield is in the process of drafting a similar measure. Shutesbury, meanwhile, currently has a data center prohibition, a measure that was put in place last September.
Velis said it is the job of elected officials to respond to their constituents’ needs, and he feels the legislative amendment would do that by establishing “set-in-stone” restrictions to ensure data center costs would not fall on residents, while also establishing environmental protections.
“We’re moving in the direction where essentially everything is powered by data,” Velis said, emphasizing that lawmakers must ensure Massachusetts data centers “will have to follow parameters.”
The bill still has several hurdles to jump, however. The bill must be considered by the state House of Representatives before being sent to Gov. Maura Healey’s desk. Energy policy negotiations have been among the trickiest for lawmakers to settle in recent sessions.
In addition to imposing clean energy requirements on data centers, the bill as a whole charts a path to wind down a program that helps cover the cost of replacing leak-prone gas pipes, restrict Mass Save’s spending on planning and administrative expenses, and more.
The Senate approved the bill just a week after Healey announced an energy framework on June 25, establishing that the state will not accept applications for data center tax incentives until further notice, freezing the state’s 2024 sales and use tax exemption for data center projects.
Healey has said that data centers can “support innovation and economic growth, but if developers want to build in Massachusetts, they need to first demonstrate that they can do so without driving up costs or harming our communities.”
The framework says data center projects “are expected to bring their own clean energy, avoid shifting or increasing costs to other energy consumers, protect environmental and community health, avoid placing additional environmental and social burdens on already burdened areas, and contribute meaningfully to the local and state economy and clean energy goals.”
Details of the bill
One of the amendments in the Senate bill regarding data centers, attributed to Sen. Vanna Howard, D-Lowell, would specifically require new or expanded centers to use their own sources of clean energy, phase out fossil fuel backups, pay their own gas infrastructure costs, meet water protection and cumulative impact standards, sign project labor and community benefit agreements, report energy and water usage publicly, and forfeit the state tax exemption if not in compliance.
“The amendment that did pass was a codification of what the governor passed a week before,” Velis said.
He noted that when projects are proposed, data center developers often claim there will be no disruption to local water and energy consumption. However, he said, “that is not the case.”
“Water costs go up, energy costs go up and [the communities] are on the hook for it, and I just view that as fundamentally unfair and that cannot be allowed to happen,” Velis said.
The senator originally proposed his own amendment to the bill, which was ultimately rejected. It would have held data centers operating at or above 20 megawatts accountable for the full cost of all electricity and water consumption, removing any financial burden from residents. It also would have mandated electric distribution companies to separately track and report all data‑center‑related expenses.
While his specific proposal did not pass, Velis said he is pleased that many of its core values and regulations were incorporated into the amendment that succeeded. Even though the broader bill has not officially passed yet, he said lawmakers will have to continuously revisit data center regulations as the technology grows.
Velis added that while data centers are often associated with AI, data collection impacts all forms of everyday life.
“Technology moves a lot faster than government,” Velis said. “I wish government can get out of its own way and be more nimble, more adaptive and flexible.”
Material from State House News Service was used in this article.
