New York Gov. Kathy Hochul signed a first of its kind statewide moratorium on construction of new large data centers for up to one year. While controversial, no other state has enacted such a pause.
The executive order applies to data center projects that utilize more than 50 megawatts of power, directs state agencies to conduct a general study on the environmental, energy, water and community impact of data centers, and explores creating a grid investment fund paid for by developers.
But the executive order Hochul signed differs from the one-year moratorium passed by state lawmakers in June during the waning days of its legislative calendar.
The executive order is more exploratory in nature, as the governor's office has expressed a need to examine the legislature's bill more fully.
One reason may be because despite it being a temporary one-year moratorium on new construction, the bill calls for some permanent regulations on data centers.
Namely:
- Creates a data center specific electric and water utility rate to pay for infrastructure upgrades.
- Mandates community benefit programs paid for by developers to invest in residential heat pumps, broadband internet and wastewater infrastructure, among others.
- Requires 90% renewable energy use at data centers by 2040.
- More transparency and analysis of subsidies given to developers for data center projects.
- Requires prevailing wages, workforce training programs and mandates for American-made components.
The legislature's moratorium bill only made an exemption for data centers used for "public research." Hochul's exemptions are more wide ranging, as seen in the highlighted text below:
"Moving fast on the things that [Hochul] agrees on I'm not necessarily negative about. I think that's maybe a possible good move," said Assemblyman Bill Conrad, a Tonawanda Democrat, who voted for the moratorium bill. "The other side of course, is it's political, and she's doing this to appease people on this issue. But at the same time, I've asked the same question myself... Why wouldn't she just sign our bill?"
Conrad believes the legislature's more extensive bill is not dead in the water, but that the governor will seek to make amendments to the proposed legislation.
"This negotiation of amendments and things they want changed, tax code and different things, takes a long time," he said. "Usually these things don't get signed until December. Well, we don't really have that much time to be able to make that kind of decision. I am hopeful that down the line we come to an agreement between the two houses and the governor."
One of those projects affected is in Conrad's Assembly district, on River Road at the former Tonawanda Coke site. A Tonawanda Town Planning Board meeting drew hundreds of community speakers blasting the proposal.
"It was I think one of the most polluted sites in all of the United States, and that developer redid it," said Conrad. "Now, when they were redoing it, they had a number of plans in place that they were discussing, and then they arrived on this data center. But bottom line, we've got to make sure that these environmental protections, as well as the neighborhood, the quality of life, and the energy supply, have to be taken."
Many building trade unions have opposed moratorium action. Arguing while regulations are supported, elongating the process to enact them could hurt job and business growth.
"A shortsighted moratorium only accomplishes one thing: it kills good-paying union jobs," said United Association of Union Plumbers and Pipefitters General President Mark McManus. "Rather than implementing guardrails to build the future of American ingenuity, Governor Hochul is taking her ball and going home. We urge the governor to work with all parties, including the hardworking New Yorkers whose jobs are at stake, to implement common sense guardrails."
