New York lawmakers approve one-year ban on data centers

New York lawmakers passed a bill imposing a one-year ban on permits for AI data centers consuming 20 megawatts or more of electricity, marking the first such measure in the U.S. The legislation, approved late Thursday, targets energy-intensive facilities and aims to prevent strain on the regional power grid, protect consumers from higher energy bills, and address environmental impacts. It also introduces a new electricity rate for large data centers, renewable energy mandates, and labor standards for projects. The moratorium was pushed by Democratic lawmakers, including state Sen. Kristen Gonzalez, who argued it would give regulators time to adapt to the industry while shielding residents from increased costs. Environmental groups praised the bill but called for a longer ban, warning that unchecked expansion of AI data centers threatens economic stability, water supplies, and local communities. Emily Wurth of Food & Water Watch described the facilities as 'monstrous, energy-intensive, water-sucking' and a major threat to New Yorkers. Opposition came from Republican lawmakers, tech companies, unions, and economic development advocates, who argued the measure was rushed and would stifle job growth. The New York State Building and Construction Trades Council urged lawmakers to reject the bill, warning it could halt economic development and undermine local agreements with data center operators. Governor Kathy Hochul has until the end of the year to sign, veto, or amend the bill, with her spokesperson stating she will review it to ensure data centers do not burden New Yorkers. The legislation also includes provisions to protect ratepayers from rising electricity costs, a key concern as AI data centers demand increasing power. Hochul’s office emphasized the need to balance oversight with economic growth, signaling a cautious approach to the industry’s rapid expansion in the state.