Governor Hochul’s Roundtable About Data Centers

FROM THE GOVERNOR’S OFFICE: Governor Kathy Hochul today held a roundtable with state, business and local leaders from Western New York to highlight her Executive Order that creates the nation’s first moratorium on new hyperscale data centers, establishing the strongest standards for data center development and creating a blueprint to support localities. The Governor is temporarily pausing State environmental permits for up to one year in order to build a nation-leading regulatory framework that protects ratepayers, the environment, the energy grid and communities across the state. “Here in New York, we will not burden our communities with rising utility costs and have them put their hard-earned taxpayer dollars toward massive data centers that aren’t ready to prioritize their future,” Governor Hochul said. “This first-in-the-nation statewide moratorium is putting the success of those who call New York home first, and we are developing a framework to ensure our communities don’t feel — and have to pay for — the environmental impacts to support these projects.”

Participants of today’s roundtable included:

Krista Atkinson, Executive Administrator, Tonawanda Chamber of Commerce
Melisa Dettbarn, Teacher, Kenmore, Tonawanda School District
Ted Kusio, Retired Digital Designer
Kate Powers, Former Professor
Frank Laurendi, Retired Construction Engineer
State Senator Jeremy J. Zellner
Assembly Majority Leader Crystal Peoples-Stokes
Assemblymember William Conrad
Deputy County Executive Lisa Chimera, Erie County
Mayor Michael Ferguson, Fredonia
John Flynn, Town Supervisor, Town of Tonawanda
Mayor Austin Tylec, City of North Tonawanda
Mayor Patrick Mang, Village of Kenmore

New York State is experiencing unprecedented growth in demand for data center development driven by artificial intelligence and other computing operations. The increase in demand has led to proposals across the state for the construction and operation of data centers that could require massive amounts of energy and water to run and cool thousands of computer servers.

Earlier this year, the Governor directed the Department of Public Service (DPS) to begin the Energize NY proceeding, which will require data centers to either pay more for their energy or supply their own, allowing the state to keep energy more affordable for New Yorkers. As part of that proceeding, the Governor is now also directing DPS to develop a Generic Environmental Impact Statement (GEIS) for data centers to ensure new data centers coming online are being held to consistent standards. During the development of this GEIS, which will take up to a year, a moratorium will be in place and the Department of Environmental Conservation (DEC) will not issue any discretionary permits not already deemed complete. The state will use the GEIS to assess the potential environmental impacts of the construction and operation of data centers in the state, including their effect on energy demand, water use and quality, and air quality. Once the State finalizes these standards, the moratorium will be lifted, allowing new data center projects to proceed as long as they follow state, zoning code and other local approvals.

The Governor also directed Empire State Development (ESD) to issue a Community Investment Framework (CIF) within 60 days, which will provide clear guidance to local entities to help them negotiate community benefits as part of any large-scale data center deal, including local infrastructure improvements, child care investments, and direct financial support for their community. The CIF will also establish frameworks that provide organized labor a seat at the table and prioritize prevailing wage standards and project labor agreements for data center construction, local hiring, apprenticeships and workforce development to maximize economic benefits. This framework will additionally include a formula to help communities assess where to begin investment negotiations. An outline of the CIF is currently available on ESD’s website, and the public is encouraged to submit feedback.

Additionally, the Governor is directing DPS to consider creating a New York Grid Acceleration Fund to require data centers to invest in the state’s aging grid infrastructure and energy needs so all New Yorkers benefit from responsible development. The fund could support the procurement of new clean energy supply and establishment of an insurance pool to which developers may need to contribute to protect against speculative large loads that create uncertainty and increase costs. DPS will also consider approaches to require data centers to fund new clean electric generation dedicated to their operations, including but not limited to customer-sited distributed energy resources and battery storage.