As AI developers attempt to “hyperscale” regional campuses, more concerns arise over power and water resources.
Did you know that there are roughly 126 data center facilities currently operating across New England? Most of the region’s computing infrastructure is heavily concentrated in Massachusetts and Connecticut, due to their closeness to subsea fiber-optic landing cables, the financial sectors, and university research hubs.
- Massachusetts has 61 facilities and smaller-scale regional server closets. The state serves as the backbone of New England’s infrastructure. Over 30 facilities are packed into the Boston Data Centers Market near the technology corridors in Cambridge, Somerville, and Marlborough.
- Connecticut has 15 facilities. The Connecticut Data Centers Market is predominantly concentrated in the southwest corner of the state to capture spillover data traffic from the New York City financial markets.
- New Hampshire has 10 facilities. Most locations sit along the southern border corridor (such as Salem and Nashua) to provide tax-advantaged regional backup and recovery options for Boston-based facilities.
- Rhode Island has 7 facilities. These are smaller co-location hubs around Providence to support local healthcare, government, and insurance networks.
- Maine has 4 facilities. These are smaller facilities serving statewide medical systems, educational institutions, and regional internet service providers (ISPs).
- Vermont has 3 facilities. Vermont has the smallest digital footprint in the region, consisting of highly efficient, smaller footprint operations that rely on the state’s colder climate and abundant green hydropower for cooling.
New Hyperscale Neighbors
While the number of facilities in northern New England remains small, the capacity, measured in megawatts, is shifting. AI developers are actively attempting to permit massive “hyperscale” data center campuses in rural New England where land is cheaper. They face stiff local pushback regarding power grid capacity and impacts on regional natural resources like rivers.
New England’s entire power grid peaks at roughly 26 gigawatts (GW). The influx of data centers creates several core power grid challenges for New England’s electric supply. The region’s buffer of surplus electricity is shrinking rapidly. ISO-NE forecasts that its planning reserve margin will decline from about 17 percent to just 8 percent over the next decade.
Unlike residential heating or cooling that peaks for a few hours at a time, a data center runs at 100 percent capacity around the clock. Data center equipment is highly sensitive to voltage fluctuations. If a regional transmission line fails, data centers are designed to instantly disconnect from the grid and switch to their own massive backup generators.
Strain on Water Systems
Communities are very troubled with the data center’s mind-boggling water consumption and the strain on their water systems. This water is often drawn from the same public supplies that serve residents, farmers, and local ecosystems; many of which are directly connected to nearby rivers and watersheds. In many cases, the water is not returned to the watershed, as much of it evaporates during the cooling process.
Data centers run twenty-four hours a day, generating enormous heat that must be constantly managed. Most facilities rely on water-intensive cooling systems, each consuming hundreds of thousands of gallons per day. Cooling towers evaporate the water into the air, carrying away the heat. Equally concerning, data centers often use chemical treatments such as biocides and corrosion inhibitors in their cooling systems, that are also carried away in the evaporated air, to eventually settle into nearby soils and waterways.
In closed-loop systems, water circulates in sealed pipes or coils that cool the servers without directly exposing water to air. Because the water isn’t evaporated to the environment, losses are minimal. It is mostly the same water recirculating. Closed-loop cooling can reduce freshwater use by up to 70 percent compared to traditional open evaporative methods. States could require closed-loop cooling in new data center projects.
Paying for Grid Upgrades
Historically, the cost of grid upgrades has been distributed across all utility consumers.
Expanding the grid to support massive data centers requires heavy capital investments in new substations, high-voltage transmission lines, and upgraded transformers. This has sparked severe political and public pushback. More than 25 states are enacting their own strict data center laws. State leaders argue that local residential families should not subsidize the infrastructure required by multibillion-dollar technology companies running data centers.
The federal approach to data center energy requirements relies on a combination of executive orders. These policies attempt to shield ordinary consumers from the skyrocketing utility costs of powering data centers. The “Bring Your Own Power” framework leverages federal directives, permitting priority, and public pressure to enforce the model.
The Bipartisan Ratepayer Protection Act is a federal legislative push designed to prevent AI data centers from driving up electricity bills for everyday consumers. The bill passed out of the House Energy and Commerce Committee in July 2026. The act requires state public utility commissions to ensure that data centers pay 100 percent of the costs for the new power generation, transmission lines, and distribution grid upgrades required to serve them.
First-Ready, First-Served
Speeding up the approval process, ISO New England is transitioning to a “first-ready, first-served” model to replace its outdated, backlogged interconnection queue. This overhaul introduces 270-day cluster studies, higher financial barriers for developers, and strict withdrawal penalties to streamline the approval of new energy projects.
Reports say data centers could consume a fifth of all US electricity within a decade, rising from under 6 percent today to roughly 20 percent by 2035.
Ed and Kelly Burke are respectively Chairman of the Board and Senior Marketing Manager at fuel distributor Dennis K. Burke Inc. They can be reached at 617-884-7800 or ed.burke@burkeoil.com and kelly.burke@burkeoil.com.
