(The Center Square) – New York lawmakers would become the first state to pause on artificial intelligence data centers under a proposal approved by the state Legislature late Thursday, which comes in response to concerns about its impact on the regional power grid, environment and already high energy bills.
The legislation, which is now headed to Gov. Kathy Hochul’s desk for review, would impose a one-year moratorium on permits issued by the state Department of Environmental Conservation for AI data centers requiring 20 megawatts or more of electricity.
The proposed moratorium also includes provisions to protect ratepayers, including a new electricity rate specifically for large data centers and energy efficiency standards. The legislation also contains renewable energy requirements and new labor standards for the projects.
Democratic lawmakers who pushed the measure through on the final day of the legislative session argue that the pause on new data centers is needed to give state regulators time to catch up with the emerging industry while protecting consumers from higher energy costs.
“For the first time we’re putting New Yorkers in the driver’s seat over big tech,” state Sen. Kristen Gonzalez, a Democrat and primary sponsor of the bill, said in remarks Thursday night ahead of its passage. “Doing nothing means that we would let those costs be passed down to our constituents.”
Environmental groups, which had pushed for a three-year ban, also praised the bill’s passage and called on Hochul to sign the bill quickly.
“The more Americans learn about AI data centers, the more they are opposed to these monstrous, energy-intensive, water-sucking facilities,” Emily Wurth, managing director of organizing at Food & Water Watch, said in a statement. “We’ve seen enough to know that the unfettered expansion of this aggressive, profit-hungry industry is one of the biggest economic, environmental and social threats of our time.
“Wherever these hyperscale data centers are built, electricity rates skyrocket for families and small businesses, water stability is threatened, and communities are turned upside down,” she added.
The measure was opposed by Republican lawmakers, high-tech companies and unions, as well as economic development advocates, all of whom argued that the changes were being rushed through the legislative process with little input. They say it would kill jobs and trample on local governments’ rights to enter into agreements with companies to build data centers in their communities.”
“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,” the influential New York State Building and Construction Trades Council said in a memo to lawmakers earlier this week, urging them to vote against the measure.
Hochul has until the end of the year to sign the bill, veto it, or send it back to lawmakers with recommended changes.
A Hochul spokesperson issued a statement saying the governor will review the proposal but said she “continues to look for ways to ensure that data centers are not draining resources or driving up costs for New Yorkers.”