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In hyperscaler hot spots like Texas and Pennsylvania, state governors continue to clamp down on the nascent industry.

Massachusetts Governor Maura Healey suspended state permit processing for data centers exceeding 25 MW until they agree to bear the costs associated with their energy needs, which must come from clean sources, and demonstrate “conformance” with standards announced in June.

New Hampshire Governor Kelly Ayotte told local media in the last month that she is against putting any data center in the state, and plans to include a multi-year moratorium in her upcoming budget.

Healey put proposed Massachusetts data centers under new standards in a September 8 executive order on the grounds that they are energy intensive and affect energy affordability and public resources if not planned and regulated.

The state department of environmental protection will develop protocols to ensure that data centers procure electricity that meets the requirements of the state’s clean energy standard.

For those that do not procure sufficient clean electricity, an alternative compliance payment system will be created to meet their annual consumption.

Developers must submit a community benefits agreement with the state executive office of energy and environmental affairs after consulting with the office of environmental justice and equity.

State agencies that review data center permits shall amend their regulations to align with the framework.

The order also said the Massachusetts Department of Public Utilities should continue to prioritize completion of large load rate schedules to avoid shifting costs from data customers to other customers.

The department should also direct the electric distribution companies to take measures to eliminate speculative data center projects from interconnection queues, the order said.

The related June statement of principles was described as a framework to ameliorate a variety of impacts. The statement said data centers present development opportunities and can strengthen the innovation economy, but can create challenges without being “carefully planned.”

Expectations include that development does not result in grid congestion or exacerbate energy supply availability, wholesale energy prices or greenhouse gas emissions.

Healey also paused in June the acceptance of applications for data centers that seek state sales and use tax exemptions.

This 20-year tax break was created by the state legislature in 2024 and went into effect in May.

Utility holding company National Grid told MAGNIFYI that it is reviewing the executive order and will work with the Massachusetts government, communities and large energy users to support responsible development while protecting affordability and reliability.

“It is important that large energy users make meaningful financial commitments and that appropriate safeguards are in place to prevent costs from being shifted,” said National Grid, which operates energy distribution companies in the region.

In New Hampshire, Governor Ayotte has reportedly said that New England’s power grid lacks the energy for large-scale data facilities without driving up electricity costs for other consumers.

She announced plans to include a multiyear pause on new data center developments in House Bill 2, the budget trailer bill for the state’s next two-year spending plan taking effect in July 2027.

She also opposes a discussed data center at the former Bow coal plant site that could be developed by Granite Shore Power in the central part of the state.

Ayotte’s office did not respond to MAGNIFYI.

An arm of utility holding company Eversource, Public Service Company of New Hampshire, asked the Federal Energy Regulatory Commission (FERC) in April to approve an agreement to evaluate a potential load interconnection of a 350 MW facility.

The filing does not say what the load would be or where. Eversource and Granite Shore did not respond to MAGNIFYI.

Elsewhere in the region, neighboring utility Unitil said it has not seen significant interest in data center development in its service territories.

“We have had some limited discussions with developers in this area, but the level remains well below what is occurring in other parts of the country,” said Amanda Vicinanzo, external affairs manager.

Unitil will monitor policy developments in Massachusetts and New Hampshire and their potential implications for customers and its system, she said.

ISO New England continues to refine its filing to FERC after the commission found this year that a large load tariff was not just and reasonable. All central grid operators were made subject to the same requirement.

Market changes are likely in future versions of the grid’s tariff. Large loads that have not signed a study agreement when ISO New England files with FERC in November will be examined under new procedures and be required to bring their own capacity in capacity markets.

Data center development slows in ERCOT

Texas Governor Greg Abbott announced on August 3 that data centers must be audited before advancing through the interconnection process of the Electric Reliability Council of Texas (ERCOT).

Abbott wants data centers to pay for their infrastructure, reuse their own water, eliminate reliance on tax breaks and reduce the cost of electricity for Texans.

Shortly thereafter, several data center developers said they intend to comply, namely Skybox, Digital Realty, Mara, QTS, Meta, Powerhouse and TWDB.

ERCOT responded by pausing its batch zero study process for those loads that are 75 MW or greater.

ERCOT directors were told last week that “almost all not yet-energized large loads” are subject to the process, a framework for system eligibility, financial security and community impact requirements.

Within batch zero, 204 projects have met the qualifications to be conditionally included as base load, for 66.4 GW. Another 158 projects met the qualifications to be conditionally included as studied load, which show sponsor commitment, and now comprise 127.9 GW.

Pennsylvania requirements

Pennsylvania Governor Josh Shapiro issued an executive order last month for data centers with peak demand of 25 MW to submit detailed energy and water use information to the state department of environmental protection to be considered for approval.

The executive order said that while there are reports of over 100 data centers proposed in the state, 20 have submitted permit applications and 14 have an exemption under a much earlier law.

While most of the data centers are speculative in nature, with no identified end user, the order said demand from prospective data centers has pushed capacity market auction prices in the PJM Interconnection to record highs.

A study released this week for the state public utility commission found that in a worst-case scenario, the incidence of a loss of load is much higher than PJM has previously forecast.

Independent consultant Synapse concluded that with high growth of data centers and constrained new resource additions, conditions could be such “that by the mid-2030s, hundreds of terawatt hours of load are unmet per year.”

Given the likelihood that neighboring electricity regions would face similar load and supply pressures, PJM would likely not be able to rely on them during critical periods, and would instead face energy shortfalls, the study said.

Depending on the year, between 2% and 19% of electricity demand would be unmet between 2031 and 2040, Synapse said. In this scenario, Pennsylvania is projected to be a net energy importer by the late 2030s.