State moratorium clouds TeraWulf data center proposal
New York Governor Kathy Hochul has issued a yearlong executive order pausing permits for AI data centers, citing concerns over utility bills, natural resources, and grid reliability. This statewide moratorium has created uncertainty for TeraWulf's proposed data center at the former Cayuga Power Plant in Lansing, though the company states it will continue with its local site plan review process. Local environmental groups support the moratorium and are pushing for stricter regulations.
New York Governor Kathy Hochul has enacted a yearlong moratorium on the issuance of permits for artificial intelligence data centers statewide. The executive order, issued July 14, halts discretionary permits for AI data centers with a peak energy demand of 50 megawatts or more, and directs the New York Department of Public Service (DPS) to develop an environmental impact statement (EIS) for data centers. The EIS will assess potential effects on energy demand, water use and quality, and air quality to establish consistent standards for future data center construction and operation.
The statewide pause casts uncertainty over TeraWulf's proposal to redevelop a portion of the former Cayuga Power Plant in Lansing into a data center. TeraWulf Chief Strategy Officer Kerri Langlais stated that the company's plans for the Lake Hawkeye project remain unchanged, as any potential operations would occur beyond the moratorium's timeframe. The company is continuing with the Lansing Planning Board's site plan review process, although at an April meeting, officials were told their application was incomplete and more specific details were requested.
Local environmental group No Data Centers FLX, which has organized against the TeraWulf project, welcomed the executive order as a win in their fight for data center regulations. Member Ben Basem emphasized the need for comprehensive regulation on environmental and energy impacts, including noise pollution, rising temperatures, and grid capability. He also expressed hope for the governor to sign a legislative bill for a yearlong moratorium with a lower 20-megawatt threshold. Meanwhile, Lansing Town Supervisor Ruth Groff indicated the town is still evaluating the executive order's impacts.
In addition to the EIS, the governor's order directs the Empire State Development Office to issue a community investment framework, and DPS will consider creating a New York Grid Acceleration Fund, which could require data centers to invest in grid infrastructure, contribute to an insurance pool, or fund new clean electric generation dedicated to their operations.