New York Lawmakers on Track to Pause Data Center Construction
New York lawmakers are poised to approve a one-year moratorium on data center development, driven by resident concerns over potential spikes in utility costs. The proposed legislation also includes guardrails such as mandating energy efficiency goals and defining specific utility rate classes for data centers. Governor Kathy Hochul is currently weighing the proposal.
New York lawmakers are on the verge of approving a one-year ban on new data center development, along with other regulatory measures, in response to residential concerns about rising utility costs. Assembly Speaker Carl E. Heastie (D) confirmed the intent to pass the legislation, which includes a temporary pause on permits for new data centers, mandates for energy efficiency, and new utility rate classifications.
The proposed omnibus measure also requires the state Department of Environmental Conservation to conduct a report on the projected impacts of data center projects on water, electricity, and tax revenue. Additionally, the Public Service Commission would be tasked with creating separate utility rate classes for large data centers to ensure they bear the costs of their grid impact. State Sen. Kristen Gonzalez (D), a sponsor of the measure, emphasized the existential nature of the issue beyond just the upcoming election.
Governor Kathy Hochul (D), while not outright supporting a moratorium, has expressed that data centers in New York should manage their own energy costs without burdening local ratepayers. She is currently reviewing the proposal. The measure is expected to be voted on by June 5 before lawmakers depart the state Capitol.