With Power-Guzzling Data Centers on the Way, New York Moves to Control Costs - THE CITY

New York lawmakers are moving to control costs in anticipation of a significant increase in power-guzzling data centers across the state. This proactive stance aims to get ahead of a potential proliferation similar to what has been seen in states like Texas and Virginia, which have experienced substantial data center expansion. The concerns stem from the high electricity and water demands of these facilities, which house machines for cryptocurrency mining, AI, and other computing activities. The New York State Independent System Operator (NYISO), which manages the state's power grid, estimates that electricity demand could jump by nearly 70% by 2030. This projection includes the impact of electric heat expansion and other large projects, notably data centers. Kevin Lanahan, vice president of external affairs at NYISO, highlighted that approximately 30 projects, potentially future data centers, requested grid connections between 2020 and 2025, each averaging close to 300 megawatts. This demand is significant, especially when compared to major renewable projects like the 810-megawatt Empire Wind offshore wind project. There are fears that without commensurate upgrades to the grid and sufficient energy supply, power reliability could be jeopardized. Furthermore, the costs associated with accommodating these data centers, including investments by utilities such as Con Edison, could be passed on to consumers through rate hikes. The issue is compounded by the fact that gas generates the majority of New York City's electricity, meaning increased demand could also lead to higher gas and electricity prices for residents. While data centers are not yet the primary cause of recent winter energy spikes, lawmakers are keen to mitigate future financial burdens on New Yorkers.