New York State Legislature passes bill to put a one-year moratorium on data centers

ALBANY, N.Y. (WBNG) — New York lawmakers have approved a bill that would place new environmental, utility, labor and community benefit requirements on data centers as the industry faces growing scrutiny over its energy and water use.

The Responsible Data Center Development Act has passed the state Senate and Assembly and now awaits action by Gov. Kathy Hochul. If signed, it would take effect immediately, and New York would be the first state in the nation to enact such a bill.

The bill would create a one-year pause on certain new permits for large data centers, defined as facilities with a peak demand of 20 megawatts or more. The moratorium would not apply to previously issued approvals or projects that began construction before the law takes effect.

The measure would also require large data center operators to hold at least one in-person public hearing in a host community at least three months before receiving state approval. Residents would have to receive at least 30 days’ notice, including information on the project’s location, expected energy use, water and wastewater impacts, and any state or local incentives sought or awarded.

The bill directs the state Department of Environmental Conservation to prepare a statewide environmental impact report on data center development. The report would examine electricity and water use, land use, pollution, electronic waste, public subsidies, and impacts on disadvantaged communities and Indigenous nations within 10 miles of data centers. A final report would be due within 18 months of the bill becoming law.

The legislation also seeks to prevent costs tied to large data centers from being shifted onto other utility customers. Electric, gas, water and municipal systems would have to create separate service classifications for large data centers, assigning costs such as infrastructure upgrades and commodity price increases to those facilities.

Data centers with a peak load of at least 5 megawatts would have to meet renewable energy standards beginning in 2030. They would need to show that at least one-third of their electricity comes from renewable energy from 2030 through 2034, two-thirds from 2035 through 2039, and 90% starting in 2040.

Large data centers would also be required to fund host community benefit programs, which could include residential heat pumps, solar panels, battery storage, broadband upgrades, drinking water infrastructure, noise mitigation, and pollution reduction.

The bill includes labor standards for data center construction, including prevailing wage, apprenticeship or workforce training requirements, and domestic iron and steel provisions for data centers with a peak demand of 5 megawatts or more.

Supporters say the measure would protect communities, workers, ratepayers and the environment as data center development grows. Opponents may argue it could raise costs or discourage investment in New York.

Municipalities across the state have already enacted moratoriums, with Oneonta enacting one back in May and Dryden banning them outright.

The bill now heads to the governor’s desk.