New York lawmakers have passed the Responsible Data Center Development Act, a bill that would stop the state Department of Environmental Conservation from issuing new approvals for large data centers for one year.
The bill, S10642/A11560, cleared the Senate on June 4 by a 43-17 vote after the Assembly passed the same measure earlier that day. If Gov. Kathy Hochul signs it, the Assembly and Senate sponsors say New York would have the first statewide data center moratorium of its kind.
The moratorium applies to facilities with peak demand of 20 MW or more. It would not apply to renewals, modifications, reissuances or projects that have commenced construction on or before the effective date.
Expanding environmental and local oversight
The bill directs DEC, working with state utility, health and water agencies and the federally designated bulk system operator, to produce an environmental impact report no later than 18 months after the measure becomes law.
The report would cover electricity use, generation sources, water consumption, wastewater, farmland impacts, pollution, greenhouse gas emissions, e-waste, public incentives and effects on disadvantaged communities and recognized Indigenous nations within 10 miles.
Large data center developers would also face new local process requirements. At least three months before DEC approval, a developer would have to hold an in-person public hearing in the host community, provide at least 30 days’ notice and pay the costs of the hearing, including state agency expenses.
Shifting grid infrastructure costs to data centers
The longer-running issue is cost allocation. The bill would require electric, gas and water providers to create separate service classifications for large data centers and assign infrastructure upgrades, administrative expenses, operating costs and related rate-of-return costs to those classes.
It would also require a rate adjustment mechanism so commodity price increases attributable to large data centers are borne by those facilities.
That language mirrors an ongoing regulatory proceeding at the Public Service Commission. In Case 26-E-0045, the PSC opened a large-load proceeding to modernize interconnection rules and said 11.9 GW of load in the NYISO queue were tied to future large-load projects as of February. One PSC objective is to ensure data centers and similar facilities “bear the cost they impose on the electric system.”
The Legislature’s bill would put statutory deadlines around that debate. It bars approval of utility rate changes after the effective date unless those filings include a large data center service classification and compliant adjustment mechanism. The new classifications would have to be implemented by June 1, 2030.
Clean energy targets for sub-20 MW projects
The legislation’s clean energy mandates also apply to smaller facilities, bypassing the 20 MW moratorium threshold. Data centers with peak load of 5 MW or more would have to demonstrate, through annual third-party verification, that one-third of electricity consumption comes from renewable energy systems from 2030 through 2034, two-thirds from 2035 through 2039 and 90% from 2040 onward.
Supporters tied the bill to utility affordability and community review. Sen. Kristen Gonzalez said, “Technology should improve peoples’ lives, not drive up our energy bills or exhaust our natural resources and increase pollution.” Assembly member Didi Barrett said lawmakers had to ensure “ratepayers are not being asked to unfairly subsidize the costs” of the industry.
The Business Council of New York State opposed the legislation even while acknowledging that data center growth poses energy and environmental challenges. The group said the moratorium would be “unnecessary and damaging to the state’s economic development efforts” and argued the state should handle the issue through the ongoing PSC proceeding instead.
What the pause means for enterprise cloud buyers
If Hochul signs the bill, the near-term exposure for cloud providers, hyperscalers and enterprise buyers would be project timing. A project below 20 MW would avoid the one-year DEC approval freeze, but projects at 5 MW or more would still face renewable-energy and labor provisions, while the bill’s energy-efficiency section applies to data centers as defined in the measure.
A project above 20 MW would face the permit pause, public hearing obligations, host community benefit requirements and separate electric, gas and water rate treatment.
Hochul has not announced a decision. The immediate next steps include formal delivery to the governor, any negotiated changes before signature and the PSC’s large-load proceeding, where Department of Public Service staff must convene a technical conference before Dec. 31 and produce a white paper within one year of the February order.