New York Legislature Approves One-Year Moratorium on Large Data Centers, New Regulations
New York lawmakers have approved a one-year moratorium on large data centers and enacted new regulations to address their impact on the state's power grid. The legislation also mandates studies on data center energy and water use, pollution, and electronic waste, while requiring developers to use renewable energy over time. The governor will now decide whether to sign the bill.
The New York legislative session concluded with lawmakers passing a $268 billion state budget and several key policy measures, including a one-year moratorium on large data centers. This legislative action, passed as part of an omnibus bill, prohibits the state from granting permits for new large data centers for a year, citing concerns about their strain on the state's power grid. The bill also mandates a comprehensive study into data centers' energy and water consumption, land usage, pollution, and electronic waste production.
Additionally, the new legislation introduces stricter regulations for data center development. It requires developers to conduct at least one in-person public hearing before permit approval and invest in residential energy infrastructure. Data centers will also face new energy mandates, including the requirement for utility companies to create a new customer class for them, with operators covering connection costs, and a long-term mandate for data centers to be powered by renewable energy sources, starting with one-third fossil-free electricity between 2030 and 2034.
The measure faced opposition from industry stakeholders and utility companies, including National Grid, which argued that such a moratorium discourages investment and that large load projects can benefit the state. Despite this, the bill advanced, marking a significant step in New York's approach to regulating the rapidly growing data center industry amidst broader discussions about the state's budget process and other policy priorities like redistricting and immigration. Governor Kathy Hochul now has until the end of the year to decide whether to sign, veto, or request changes to the approved bills.