New York is moving closer to what could be the country's first moratorium on new large data centers, Politico reported.
The measure, sponsored by state Sen. Kristen Gonzalez and Assemblymember Didi Barrett, would temporarily bar the Department of Environmental Conservation from issuing new permits for data centers above 20 megawatts. It was introduced on Monday, and lawmakers were expected to consider it this week before leaving Albany on June 4.
If Gov. Kathy Hochul ultimately signs the legislation, new mega-facilities would be put on hold for one year while the state studies their effects.
The bill would also set special electricity rates for large data centers and require DEC to compile an environmental review of data centers within 18 months, according to Politico.
"The one year moratorium gives us the time and space to properly promulgate rules and plan for what our energy future can look like, where we are not only protecting our energy grid, but we're protecting our utility rates," Gonzalez said, as reported by Politico.
Data centers have become one of the most contentious issues in the country, especially as AI and crypto operations expand.
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Large data centers can use enormous amounts of electricity, putting pressure on local grids and potentially driving up utility costs. That could leave families and small businesses paying more through their monthly bills.
Supporters said the pause would give the state time to craft better rules before approving more energy-hungry facilities. They argued it would protect communities from rushed development while favoring projects that rely on cleaner power and use less energy.
Business groups, the tech sector, and the Digital Power Network, on the other hand, oppose the moratorium.
"We think it would overall be damaging to the state's economy," said Stacey Sikes, acting president and CEO of the Long Island Association.
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Supporters have framed the bill as a pause rather than a permanent ban. Gonzalez has said the goal is to protect both the grid and utility rates while the state decides what responsible growth should look like.
"We need to know what the full impact is of these large data centers on air, water, soil and noise pollution, the impact on farmland, and the magnitude of electronic waste," said Assemblymember Anna Kelles, as relayed by Politico. "We know the impact is significant but we can't minimize it if we don't know the full magnitude."
Gov. Hochul has been reluctant to embrace the idea of a moratorium, but Politico reported that Hochul spokesperson Kristin Devoe said, "The Governor will review the bill."
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