Data centers descend on needy Upstate NY towns. Is anyone looking out for us?
Upstate New York is experiencing a surge in data center proposals, raising concerns about electricity consumption, grid strain, and limited job creation. Governor Hochul has initiated a statewide review of potential regulations by the Public Service Commission, while local officials struggle with approval processes. The developments face increasing opposition due to noise, environmental impacts, and substantial tax breaks.
Upstate New York is grappling with a rapid increase in data center developments, transforming vacant industrial sites into massive server farms. This influx, driven by the demand for artificial intelligence and other digital services, poses significant challenges for the state's power grid and local communities.
Governor Kathy Hochul has ordered the state Public Service Commission (PSC) to conduct a year-long review of potential data center regulations, with suggestions expected for public comment by next February. Critics, including environmental attorney Mandy DeRoche from Earthjustice, argue that data centers are currently under-regulated, leading to rushed decisions by small-town officials who often prioritize property tax revenue over broader impacts.
Specific projects highlight the concerns: Stream Data Centers, owned by Apollo Global Management, plans a $19.5 billion, 500-megawatt facility at the STAMP industrial park in Genesee County, which faces opposition from the Tonawanda Seneca Nation over tax breaks. In Lysander, residents have petitioned for a moratorium against a planned 300-megawatt data center, even before a permit application has been filed. Meanwhile, Digi Power X is facing a federal class-action lawsuit from North Tonawanda neighbors over persistent noise and vibrations from an existing data center.
The massive electricity demands of these hyperscale data centers, some requesting over 100 megawatts, are raising fears of increased energy prices and strain on New York's already stressed grid. The New York Independent System Operator (NYISO) advises on grid connections but does not consider cost, leaving local authorities to weigh projects based on local benefits like PILOT payments and a small number of permanent jobs, often without transparency regarding the ultimate operators. National Grid suggests data centers could help fund grid improvements, but the broader policy on energy supply and regulation remains contentious.