State lawmakers plan to pass a one-year moratorium on new data center projects in New York before the end of the legislative session this week. If the moratorium is approved and signed into law, advocates say it would be the first of its kind for any state.
The moratorium would place a hold on large data center projects and require an environmental impact study on development of such centers in New York state. It would also require data centers to eventually rely mostly on renewable energy sources and help fund projects that benefit the communities where they are located.
Assembly Speaker Carl Heastie said the last-minute bill is a compromise after advocates sought a three-year ban.
“It was a combination of a number of bills, I say it was more of an omnibus bill,” Heastie said. “But between the two houses, we talked to many other stakeholders, so I think we're comfortable in passing that bill.”
According to Good Jobs First, a government watchdog group, at least a dozen states are considering data center moratoriums. New York could be the first to institute such a freeze if the bill passes and Gov. Kathy Hochul signs it into law. Maine's Legislature passed a moratorium in April, but Gov. Janet Mills vetoed the measure.
"Lawmakers in many states are considering legislation to pause or eliminate data center tax subsidies," said Kasia Tarczynska, senior research analyst at Good Jobs First. "This reflects a need for greater scrutiny of data center industry's consumption of electricity, water, and land, as well as the scale of tax subsidies they receive."
Advocates of a moratorium had rallied at the Capitol in recent weeks, and the effort gained momentum as more lawmakers joined to sponsor the legislation.
“As legislators, individually, we have the responsibility to step up and have a plan, and that is simply what we’re trying to do,” said Sen. Kristen Gonzalez, a Queens Democrat. “All we're trying to say is that it is reasonable to have a pause, a moratorium on the building of new data centers, so that we can plan for our energy future. So that we can protect our environment.”
But those who oppose the moratorium are making a lobbying push of their own, saying the proposal would cost jobs and destabilize the regulatory environment.
“There's already protections, and you already have to go through a lot of permitting review processes to build any infrastructure of this size,” said Smythe Anderson, executive director of the Digital Power Network, a coalition of bitcoin miners and digital infrastructure leaders. “So a moratorium is just a signal to folks saying, you know, we're not open for business here in New York.”
During an event in Brooklyn on Wednesday, Hochul said she would not comment on the legislation until it passes the Legislature, but said she is looking closely at the issue.
“I think that much more should be done to ensure that communities are benefiting enormously from this and there's not a drain on the power sources in that area," Hochul said. "So I will look at this one-year moratorium in the context of also knowing that the status quo can't continue, that much more needs to be done to derive benefits if they are in the state of New York."
The regular session had been set to conclude on Thursday, but Heastie confirmed that the session will likely extend into Friday.
This story has been updated with new information.
