New York urges $1 million community investment per data center megawatt
New York has introduced a voluntary Host Community Investment Framework, recommending communities seek at least $1 million per megawatt from data center developers for local investments. This guidance comes during a statewide one-year moratorium on new data center projects, imposed by Governor Hochul's Executive Order 62, which also directs state agencies to develop environmental and utility rules.
New York State has unveiled a voluntary Host Community Investment Framework, advising local governments to seek at least $1 million in community investment for every megawatt of power demanded by proposed data centers. This framework, directed by Gov. Kathy Hochul through Executive Order 62, aims to guide negotiations between communities and developers during a statewide one-year moratorium on new data center projects.
The framework is not a mandatory tax but a benchmark for negotiated agreements, which could include payments to local investment funds. It encourages officials to assess a facility's demands on land, electricity, water, and infrastructure against potential benefits like jobs and tax revenues, while also suggesting investments in roads, utilities, housing, education, and public safety.
Executive Order 62, issued on July 14, imposed the moratorium to allow the state to develop comprehensive environmental and utility rules for data centers. Concurrently, the Department of Public Service is developing an Energize NY proceeding to prevent electricity cost shifts to other customers and is considering a New York Grid Acceleration Fund to require developers to support grid upgrades.
Furthermore, the Department of Environmental Conservation will conduct a generic environmental impact statement, examining electricity demand, water use, and air/water quality, during which discretionary permits will not be issued. Governor Hochul is also pursuing legislation to eliminate state sales-tax exemptions for very large data centers.