New York proposes moratorium on data center permits

The New York State Senate has introduced Senate Bill S.9144, which would impose a statewide moratorium of at least three years on the issuance of state or local permits of any kind for the siting, construction, or commencement of operation of data centers capable of using 20 megawatts (MW) or more of electricity. The bill does not revoke previously issued permits, but it applies to any additional permits required for data centers already under construction but not yet completed and operational.

Among others, the bill cites considerations related to energy strain, water consumption and greenhouse gas emissions tied to rapid expansion of high capacity data centers, particularly those supporting artificial intelligence (AI) and cloud computing infrastructure. This bill, if enacted, will have significant implications for pending and future data center development in New York.

Key provisions

• Immediate moratorium: No new state or local permits of any kind may be issued for siting, construction, or commencement of operation of a data center until at least 90 days after 1) the Department of Environmental Conservation (DEC) issues new regulations and 2) the Public Service Commission (PSC) takes required actions under the proposed new Section 66-x of the Public Service Law. This prohibition would apply to all permits pending or filed after the effective date, which is 30 days after the bill becomes law (Effective Date).
  
  
• Covered facilities. The moratorium applies to "data centers," defined as buildings, equipment, structures, or infrastructure designed for data processing, storage, transport, web hosting, or streaming support that are capable of using 20 MW or more of electricity. This includes both single-occupant and multi-occupant sites, and the definition captures facilities owned or operated by affiliates under common control.
  
  
• Required studies and rulemaking timeline. Before the moratorium can be lifted, the DEC must prepare a Generic Environmental Impact Statement (GEIS) addressing electricity consumption, water usage, land use, pollution (including greenhouse gases, air pollutants, and noise), and electronic waste from data centers. The GEIS process includes a minimum 120-day public comment period and nine regional public hearings across New York. Final regulations may not be issued until at least three years after the effective date.
  
  
• Rate impact study and cost allocation. The PSC must issue a report within 18 months on data center impacts on electricity and gas rates for residential, commercial, and industrial users. No sooner than three years after the effective date, the PSC must issue any additional orders necessary to minimize, to the greatest possible extent, the impact of data centers on electricity and gas rates for residential, commercial, and industrial users. Notably, the legislation contemplates that all costs associated with providing and maintaining electric and gas service to data centers – including new generation, transmission, and distribution infrastructure, as well as increases in wholesale supply and capacity market prices – will be allocated to data center operators.

All potentially affected parties are encouraged to closely monitor the New York legislative process for this bill and, if enacted, consider engagement strategies during the anticipated public comment periods. For more information about this proposed legislation or how it may impact your pending or planned projects, please contact Joe Stefano or David Pope.