Legislature moves to slow growth of data centers in NYS

ALBANY — The State Legislature is poised to hit the brakes on the rapid growth of data centers by passing a bill that puts a one-year moratorium on siting and will require statewide hearings on environmental impacts.

The moratorium is just one part of an "omnibus" data center bill the Senate and Assembly say they will pass before the 2026 legislative session concludes Friday.

Other key aspects of the legislation include mandating that data centers provide a "host community benefits" package and obtain at least one-third of their energy supply from renewable sources. It also would reclassify data centers for purposes of calculating charges for water and energy consumption.

It is unclear if Gov. Kathy Hochul will sign or veto the bill, even though it is supported by her fellow Democrats.

Just hours after legislative leaders said the data center bill would be approved, an array of major building and construction unions launched an effort to kill it or create a road map for a future Hochul veto.

New York is one of 14 states considering banning or placing a moratorium on development of data centers, which use extraordinary amounts of power, according the National Conference of State Legislatures.

The bill set to be approved in Albany represents a combination of multiple bills lawmakers have been considering amid the rapid spread of data centers around the country and proposals in communities — such as Brookhaven — for a moratorium, lawmakers said.

"This is a very significant package and a response to a very bipartisan outcry from the public to protect communities," said Assemb. Anna Kelles (D-Ithaca).

Kelles supported several data center pieces of legislation, including one that would have imposed a three-year moratorium on permits. But, given this is the final week of the legislative session, she said house leaders put together the pieces lawmakers "felt needed to be in place" before next year.

"We couldn’t leave session without addressing data centers, given the sheer amount of data center proposals," Kelles told Newsday. She said pending data center proposals across New York are requesting 11 gigawatts of energy — nearly double the current household usage.

Brookhaven is one community weighing a local moratorium. Town Supervisor Dan Panico, a Republican, has called for state lawmakers to support a regional approach to siting issues.

Assembly Speaker Carl Heastie (D-Bronx) deflected industry criticism that the legislation would destabilize the regulatory atmosphere, noting the one-year moratorium isn’t as lengthy as some lawmakers wanted. But he acknowledged Hochul’s support isn’t assured.

"The governor's office knows that we want to do this," Heastie said. "I don't know if they're in agreeance ... yet, but they know that we're doing this."

Hochul’s office said the governor would study the bill. Spokeswoman Kristin Devoe added in an email: "Additionally, Gov. Hochul continues to look for ways to ensure that data centers are not draining resources or driving up costs for New Yorkers and introduced a proposal as part of her State of the State in January to require data centers pay their fair share for the power that they use."

By Tuesday afternoon, major trade unions were mounting a challenge to the bill. They acknowledged the bill contains a provision requiring data center construction to use union labor — but they want no part of a building freeze.

Gary LaBarbera, president of the state Building and Construction Trades Council, which represents 200,000 construction workers, issued a statement saying: "While the NYS Building Trades recognize the provisions of this bill that call for strong labor standards on data centers and other energy infrastructure, we strongly oppose the one-year moratorium on large-scale data center construction."

Newsday’s Steve Hughes contributed to this story.

By Yancey Roy

yancey.roy@newsday.com@yanceyroy