‘We can’t wait 20 years to start the conversation, because in 20 years, the situation will be different’ – Rep. Paulino
BOSTON, May 7, 2026…..Massachusetts lawmakers and industry leaders are split on how the state should grapple with the energy and climate impacts of data centers that are fueling artificial intelligence, as pressure mounts nationally over rising utility costs and environmental strain.
The divide surfaced Thursday morning when Rep. Francisco Paulino said Beacon Hill needs to start planning now for data centers and AI infrastructure — even after his chamber rejected a proposal to do so last week — while Sen. Barry Finegold countered that Massachusetts lacks the power capacity to seriously contemplate the types of massive data centers that are being built in other states.
Energy Constraints and Infrastructure Limits
Massachusetts has a small number of these server hubs that process and store data compared to other states where development has taken off, and Finegold said the Bay State’s energy capacity inhibits development.
“In Europe, their electric vehicles are pushing 30% of the total vehicles out there — 30%. Pushing that number. We’re probably 5%. We can never get to 30% in our state because we just don’t have enough power. So, when people talk about data centers, I’m like, we’re not even near that. We don’t have enough power,” Finegold said during a State House News Service and MASSterList panel on “The AI Revolution in MA: Disruption, Risk, Opportunity” at MCLE Conference Center in downtown Boston.
The Andover Democrat, who chairs the Joint Committee on Economic Development and Emerging Technologies, said Massachusetts doesn’t have the “luxury” of having the conversation around data centers for about 20 years, “until we do a better job of producing power and bringing more power into the state.”
“But we need to start that conversation now, senator,” Paulino responded. “We can’t wait 20 years to start the conversation, because in 20 years, the situation will be different.”
Environmental and Community Concerns
The House last week rejected, without debate, a Republican budget amendment calling for a commission to study the impacts of data centers on local communities, including energy and water consumption.
The amendment, filed by Rep. Kelly Pease, reflected the growing debate unfolding nationwide as communities push back against large-scale data center projects tied to AI expansion. Critics warn the facilities can strain electric grids, increase utility costs and consume enormous amounts of water, while supporters argue they are essential infrastructure needed to power economic growth.
National Debate and Policy Trends
“There are 650 bills around the country on data centers, covering everything from proposed moratoriums to tax benefits to everything in between,” Stephen Rothstein, chief program officer at sustainability nonprofit Ceres, said. “We think there should be a minimum standard to make a data center sustainable.”
Paulino, who serves on the House Committee on Climate Action and Sustainability, said lawmakers cannot afford to ignore local concerns as AI development accelerates.
“There’s concern about the environment, but also, how this will affect particular communities,” Paulino said. “When we bring innovation, we need to have input from all stakeholders. The most important stakeholders are the people in those communities.”
Pressed on whether the House would revisit the topic after rejecting it last week, Paulino said “of course.”
“Yes, we will revisit it,” he said. “We need to consider the impact of those data centers, but also the effect that this new development will have in the commonwealth day-to-day.”
Finegold said the state is both failing to produce enough of its own energy and not bringing in enough energy from elsewhere to support major data center development.
“I wish we could have the conversation, but, there’s certain parts of our state that you’re like, ‘I want to start a company,’ and you’re like, ‘I can’t get enough power,'” he said.
Innovation vs. Sustainability Trade-Off
Rothstein warned that it’s not just a question of energy, but of natural resources. Data centers consume millions of gallons of water for evaporative cooling to keep major computer servers running.
He pointed out that most of Massachusetts has been in a drought since 2024.
“If there’s drought, you can’t build. I was with a company in California six months ago that got a $30 million purchase order. They couldn’t accept it because they couldn’t get a water permit because of a drought,” he said. “We’re not in that situation today, that bad, but if we’re not aware of it, we will be in terms of heat and water and impact.”
At one point, Rothstein used a water bottle as a prop to illustrate AI’s hidden resource demands.
“If you go back to your office today, your school, and you say 10 times you’re going to go to AI to ask a question — that’s like 10 times, dumping this on the street,” he said, gesturing to the bottle. “When we’re using AI, we are wasting an enormous amount if they’re not built from a data center that’s sustainable.”
These climate concerns are halting data center development across the country and globe.
“There’s a lot of data centers being developed,” he said, but also “there’s $154 billion of data center development put on hold because of community opposition.”
Implications for Massachusetts Policy
Lowell in March passed a yearlong moratorium on data center development, and there are campaigns in other cities and towns hoping to follow suit.
Rothstein said developers and policymakers could reduce resistance by requiring sustainability measures and community benefits, including weatherization programs for low-income households, renewable energy use and water offset projects.
“These are not radical ideas,” Rothstein said. “You can make a data center a community asset, not a community liability.”
Kevin Bolen, KPMG’s head of AI transformation, strategy and investments, said that AI could create a new space of job creation and innovation to solve the very problems the technology creates.
“The data center concerns are valid, and the power constraints are valid, the water constraints are valid,” Bolen said. “It creates a secondary innovation market, where people solve those problems.”
Bolen described emerging technologies ranging from lower-power computer chips to experimental small-scale backyard nuclear fusion reactors to power the centers, saying he did not believe energy limitations would permanently constrain AI development.
“I look at a lot of the energy that’s going around to solve those challenges, and I don’t think that’s going to be the limit. Five to 10 years from now, we will work past that because as a society, you can’t live without water. We can’t afford $9,000 electric bills for our house every day because the data center down the street sucked it all up,” he said.
“That’s not sustainable,” Bolen said. “We will have to break through those barriers.”
The discussion underscored a tension lawmakers will have to contend with as Massachusetts positions itself as a hub for AI innovation while also pursuing aggressive climate goals and confronting already-high utility costs.
“If we don’t have those conversations, those risks that we are so afraid of, they will be dominating us,” Paulino said. “They will be defining us.”
