What happens when data centers become obsolete? Hochul wants a plan for that
New York Governor Kathy Hochul is developing a statewide framework for data centers to address concerns about power and water usage, noise, and decommissioning. The plan includes regulating power usage, restricting tax breaks, and requiring developers to post decommissioning bonds. A major project by Stream U.S. Data Centers in Genesee County is currently stalled due to an enacted moratorium on new large data center construction.
Gov. Kathy Hochul of New York is leading an initiative to establish a statewide framework for regulating large-scale data centers, including provisions for their eventual decommissioning. During a roundtable discussion held at the Henrietta Town Court in Monroe County, she underscored the importance of requiring developers to secure "decommissioning bonds" to prevent abandoned facilities from becoming environmental blights, drawing a parallel to the defunct Bethlehem Steel plant.
The proposed framework seeks to impose restrictions on tax incentives for data centers, regulate their power consumption by mandating self-generation or higher grid rates, and empower communities to negotiate for local benefits. Governor Hochul acknowledged public apprehensions regarding increased utility costs, water depletion, and noise pollution, while also noting that these substantial projects often generate limited long-term employment. Consequently, a moratorium has been enacted, pausing the construction of unapproved data centers exceeding 50 megawatts statewide.
This moratorium has directly impacted a significant $19.5 billion, 500-megawatt project by Stream U.S. Data Centers in Genesee County. Local officials, including Genesee County Legislature Chairperson Christian Yunker, are advocating for the project, highlighting its potential to transform the community and address a municipal water shortage. Yunker emphasized the project's plans for a closed-loop water system and investments in the local electrical grid. However, Governor Hochul affirmed that the project is not yet ready for approval, indicating that the pause allows for a reassessment of its scale and the appropriateness of the proposed tax breaks.