Could the data center moratorium cost New York grid investments?
New York Governor Kathy Hochul has enacted a moratorium on new hyperscale data centers, citing concerns over high electricity prices. The Public Service Commission will spend the next year exploring options, including separate rate systems or requirements for data centers to bring their own power. This policy has drawn criticism from business groups like Upstate United, who argue it could hinder grid investments, and has also seen a response from President Donald Trump advocating for tech companies to bear the costs of new energy infrastructure.
New York Governor Kathy Hochul has issued an executive order establishing the nation's first moratorium on new hyperscale data centers. Speaking at a roundtable with Long Island leaders, Gov. Hochul emphasized that these large power consumers should either generate their own electricity or pay a premium for the energy they consume, aiming to prevent higher electricity prices for residents.
The executive order initiates a year-long process during which the state's Public Service Commission will evaluate various options. These include establishing a separate rate system specifically for data centers and defining what it means for facilities to provide their own power. This ongoing consideration is cited by Hochul as a key rationale for the moratorium.
However, the statewide moratorium is facing scrutiny from business groups. Justin Wilcox, executive director of Upstate United, a non-partisan advocacy coalition, expressed concerns that a year-long pause is too extensive and could deter data centers from making critical grid investments, a trend observed in other states like Arkansas where hyperscalers are investing in power generation. Separately, former President Donald Trump weighed in on the issue, introducing the "Ratepayer Protection Pledge" from the White House. This pledge commits hyperscale AI companies and data center developers to build or acquire all necessary power and infrastructure, ensuring American consumers do not bear these costs.