Albany Democrats poised to impose 1-year ban on new AI data center construction in NY
New York legislators are poised to vote on a bill proposing a one-year moratorium on new AI data center construction statewide. The ban aims to address growing concerns over the environmental impact, energy consumption, and potential increases in utility rates. Governor Kathy Hochul has indicated disapproval, preferring such decisions be handled at the local level.
The New York State Legislature is planning to vote on a bill that would impose a one-year moratorium on the construction of new AI data centers across the state. This legislative push, led by Assembly Speaker Carl Heastie (D-Bronx), aims to address a growing backlash over the significant energy consumption and environmental impact of these facilities. If passed, the bill would make New York the first state to enact such a ban, though it would still require Governor Kathy Hochul's signature to become law. Governor Hochul has previously expressed her preference for data center decisions to remain at the municipal level, viewing them as local land-use issues.
The proposed legislation, introduced by State Senator Kristen Gonzalez and Assemblymember Didi Barrett (D-Poughkeepsie), chair of the energy committee, is framed as a compromise to an earlier proposal for a three-year ban. It mandates that the state Department of Environmental Conservation (DEC) complete an 18-month impact study, recommend new regulations, and hold public hearings before issuing permits. Additionally, the bill includes provisions for green energy use standards, requiring data centers to derive increasing percentages of their electricity from renewable sources starting in 2030, and subjects construction to union bargaining and prevailing wage standards.
Proponents, including Assemblymember Anna Kelles (D-Tompkins) and Laura Wheelock, executive director of the Public Utility Law Project, argue that a pause is necessary to assess impacts on water, air, noise pollution, farmland, and electronic waste, and to prevent utility rate increases experienced in other states. Conversely, the Business Council of New York State, along with groups like Tech:NYC and the Bronx Chamber of Commerce, opposes the moratorium, calling it a "knee-jerk reaction" and asserting that data centers are essential economic infrastructure that could stabilize utility rates. Ken Pokalsky, vice president of government affairs for the Business Council, emphasized the broader role of data centers beyond AI, supporting various sectors of the state's economy.