New York State Lawmakers Pass One-Year Data Center Construction Moratorium

The New York State Legislature passed a one-year moratorium on new data center construction on Thursday, allowing lawmakers to assess how to regulate the booming industry.

The state’s Senate and Assembly both chose to put a hold on permits to build new data storage facilities in the state, in order to determine what kind of legal guardrails need to be in place to protect environmental resources, infrastructure bandwidth and local communities.

The passage of the bill in both chambers fell on the last official day of the legislative session in Albany, and it’s unclear if Gov. Kathy Hochul will sign the legislation into law.

Hochul’s office kept opinions to itself regarding whether the moratorium would hold up.

“The governor will review the bill,” was all a spokesperson for the executive chamber said to Commercial Observer.

But Hochul’s office has been proactive in attempting to keep utility costs down as demand for data storage balloons with the growth of artificial intelligence. The governor’s office has  instructed the New York State Public Service Commission to review how consumers can be protected.

One of those ways is by ensuring that data centers have dedicated power supplies that don’t overwhelm the public electric grid.

“New York will continue to lead in attracting new technologies, but we must also grow responsibly, ensuring affordability comes first and those profiting from data growth pay their share,” Hochul said in a February statement. “To prevent rising costs for everyday consumers, the state will enforce a simple standard: These industries must cover the costs of their expansion as it relates to utilities — just the same way it works for everyday consumers.”

The offices of Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins did not immediately respond to  requests for comment.

Mark Hallum can be reached at mhallum@commercialobserver.com.