Amendment ID: S3143-140

Amendment 140

Data Center Cost Responsibility

Mr. Velis moves that the proposed new text be amended by inserting after section 105, the following section:-

SECTION XXX. Chapter 164 of the General Laws is hereby amended by inserting after section 1L the following section:-

Section 1M. Electric Service Requirements for Data Centers; Ratepayer Protections.

(a) For purposes of this section, the following words shall have the following meanings unless the context clearly requires otherwise:

“Data center”, a facility, campus of facilities, or array of interconnected facilities used to operate, manage, or maintain computers, servers, networking equipment, or other hardware and software systems for the purpose of processing, storing, retrieving, or transmitting data, with a peak annual electric demand of twenty megawatts (20 MW) or greater.

“Qualified data center”, as defined in section 6 of Chapter 64H.

“Distribution company” as defined in Section 1 of Chapter 164.

“Department”, as defined in Section 1 of Chapter 164.

(b) Every contract between an electric distribution company and a data center or qualified data center for the provision of electric service shall include terms and conditions designed to protect residential and commercial retail ratepayers from costs associated with data center construction and operation, including but not limited to: (i) a prohibition on cost‑shifting, ensuring that no costs associated with the planning, siting, permitting, construction, upgrade, expansion, interconnection, or operation of electric infrastructure primarily required to serve a data center or qualified data center shall be allocated to, recovered from, or otherwise imposed upon residential or commercial retail ratepayers; (ii) full cost responsibility requirements under which the data center or qualified data center shall bear all direct and indirect utility system costs, including but not limited to local system upgrades, substations, transformers, feeders, or transmission extensions, network capacity increases, ongoing operation and maintenance costs attributable to serving the facility, and any stranded or under‑recovered costs resulting from a reduction in load, cessation of operations, or failure to meet projected usage; (iii) cost‑recovery agreements requiring the data center or qualified data center to enter into binding contractual commitments that ensure electric distribution companies remain fully indifferent to the facility’s load over the expected useful life of any infrastructure installed to serve it; (iv) financial assurance mechanisms requiring the data center or qualified data center to provide adequate financial security—such as insurance instruments, bonds, letters of credit, or exit‑fee arrangements—to guarantee the recovery of all infrastructure‑related costs in the event the facility shuts down, reduces load, or otherwise fails to meet contracted obligations; (v) transparency and reporting obligations requiring electric distribution companies to track and separately account for all costs associated with serving the data center or qualified data center and to make such information available to the Department upon request, including engineering studies, cost‑allocation methodologies, and interconnection agreements.

(c) Prior to the execution of any contract between a municipality or water supplier and a data center or qualified data center, the applicant shall obtain a written Water Compatibility Statement from the applicable municipal or regional water supplier certifying that:(i) the projected water demand of the data center or qualified data center is compatible with existing system capacity; (ii) based on reasonably available information, the projected demand can be accommodated without materially reducing the reliability of drinking water service for existing customers in the host or neighboring communities; (iii) the proposed water use is consistent with applicable municipal, regional, or state drought management plans. Nothing in this subsection shall be construed to require the creation of a new or separate state permitting program.

(d) During any period in which the Commonwealth or the applicable municipality declares a drought under state or local law, a data center or qualified data center shall implement water‑use reductions consistent with the municipal or regional drought‑management requirements applicable to similarly situated large commercial or industrial users.

(e) A data center or qualified data center shall provide the municipal or regional water supplier, on an annual basis, with a report summarizing total water withdrawals, the use of reclaimed or non‑potable water sources, and estimated consumptive losses. Any proprietary, technical, or security‑sensitive information contained in such reports shall be treated as confidential and exempt from public disclosure to the fullest extent permitted by law.

(f) The requirements of this section shall be implemented in a manner that promotes predictability, supports continued data center development in the Commonwealth, and ensures protections of ratepayers and communities.