New York Lawmakers Send Hochul One-Year Ban on New Data Centers

New York moved closer to being the first state to pause building out new data centers as lawmakers, citing voter concerns over utility spikes, advanced a one-year moratorium on the energy-intensive facilities Thursday.

Democratic lawmakers this week rapidly coalesced around a “responsible data center development” measure that includes the one-year pause on new permitting for data centers that require at least 20 megawatts of energy. The package now heads to Gov. Kathy Hochul (D) who hasn’t supported a moratorium outright but said last week she is weighing the measure.

Lawmakers mentioned residential concerns over what data centers could mean for utility bills ahead of the November elections. State Sen. Kristen Gonzalez (D), a bill sponsor, said the moratorium measure also includes stronger requirements that developers engage with the public, clearer standards of community benefits, and gives local governments an edge when approached by “tech goliaths” such as Amazon. com Inc. or Meta Platforms Inc..

“For the first time we’re putting New Yorkers in the driver’s seat over big tech,” Gonzalez said during floor debate, tying the issue to affordability of energy bills. “Doing nothing means that we would let those costs be passed down to our constituents.”

“This isn’t a normal threat. Hyperscale centers are on a scale we have literally never seen before.” Gonzalez added. “It’s not existential to say that the energy demand that’s increasing is because of these data centers.”

The moratorium legislation includes other guardrails such as workforce standards and energy efficiency goals. The state Senate passed it 44-16 and the Assembly by 102-39 Thursday.

Unions and economic development advocates join most GOP lawmakers in protest against the measure, though some Republicans split with their colleagues Thursday in supporting the moratorium. Opponents argue it will hamper job creation and stifle the ability of municipalities to make their own decisions.

Unions will move to dissuade Hochul from adopting the measure this summer, according to a memo circulated this week by the influential New York State Building and Construction Trades Council.

“While we appreciate the need to better account for oversight of data centers, we look forward to working on this legislation moving forward to ensure it does not halt economic development and the many jobs being created for the members of the Building Trades,” according to the memo.

Hochul has until December to approve or veto bills that are sent to her desk. Hochul spokesperson Kristin Devoe said in a statement the governor will review the legislation and added that Hochul “continues to look for ways to ensure that data centers are not draining resources or driving up costs for New Yorkers” as part of her platform.