(Chris Wade, The Center Square) New York became the first state to pause on energy-hungry data centers under an executive order signed by Gov. Kathy Hochul Tuesday, which comes in response to concerns about rising utility bills and the regional electric grid.
The directive signed by Hochul sets a one-year moratorium on permits issued by the state Department of Environmental Conservation for artificial intelligence data centers requiring 20 megawatts or more of electricity.
“New York has always been at the forefront of innovation and change but we’ve also always guaranteed that New Yorkers benefit,” Hochul said in remarks Tuesday. “As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead.”
Hochul said New York “will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too.”
The order also calls for creating a New York Grid Acceleration Fund that would require data centers to invest in the state’s aging grid infrastructure to lower energy costs.
Like many states, New York is struggling to balance the energy demands of the artificial intelligence industry without driving up electricity costs or disrupting regional power grids. Lawmakers in at least five other states — Georgia, Maryland, Oklahoma, Vermont, and Virginia — have filed bills to set proposed moratoriums on new data centers. No state had set a total ban, until now.
New York Democrats approved a similar moratorium proposal during the recent legislative session, but Hochul opted to go with her own plan, which goes into effect immediately.
The moratorium was opposed by Republican lawmakers, high-tech companies and economic development advocates. They argued that even a temporary ban would eliminate jobs and trample on local governments’ rights to enter into agreements with companies to build data centers in their communities.
“Data centers are the essential backbone of the modern economy, supporting financial services, cloud computing, university research, advanced manufacturing, and the continued growth of artificial intelligence,” Justin Wilcox, executive director of the group Upstate United, said in a statement. “A moratorium on data centers is fundamentally inconsistent with New York’s stated objective of becoming a national leader in artificial intelligence.”
Organized labor also opposed the temporary moratorium, arguing that it will hinder economic development in upstate regions that are struggling to attract new businesses and taxpayers.
In a recent op-ed, Daniel Kuntz, business manager of Laborers’ Local 435, which represents hundreds of union workers in the Rochester and Finger Lakes region, ripped lawmakers for supporting legislation “that sends a clear message to employers and investors that New York State is closed for business.”
“Every data center built in New York means thousands of hours of work for laborers and the entire building trades,” he wrote. “It means apprentices getting their first opportunity to enter a registered apprenticeship program. It means veterans, young people, and working families gaining access to good-paying, middle-class careers. Your vote puts those opportunities at risk.”
