New York lawmakers pass one-year ban on new data centers

The New York State legislature has passed a bill instituting a one-year moratorium on new large data center developments, a move that would make New York the first state to enact such a ban if signed into law by Governor Kathy Hochul. The legislation, which awaits Governor Hochul's signature or veto by December, is intended to provide state policymakers with time to assess the environmental and energy impacts of large data centers, defined as those requiring at least 20 megawatts of peak demand. It mandates that the state's environmental agency produce an impact report on data center electricity, water, and land usage, as well as pollution generation. Furthermore, the bill requires companies proposing large data centers to hold and fund a public hearing three months prior to seeking project approval.

While the bill's proponents aim to address concerns about data center expansion, particularly given that the New York Independent System Operator is reviewing 24 data center proposals totaling over 9,000 megawatts, the measure has drawn criticism from industry groups. Stacey Sikes, acting president and CEO of the Long Island Association, argued that a blanket moratorium could be economically damaging to the state by hindering beneficial data center projects. This legislative action follows a similar attempt in Maine earlier this year, where a bill to ban new data centers until 2027 was vetoed by Governor Janet Mills due to a lack of exemptions for previously planned projects. Governor Hochul's office has stated she will review the bill.