Kenmore, N.Y. (WBEN) - During a visit to Western New York on Monday, New York Gov. Kathy Hochul made a stop in the Village of Kenmore to hold a roundtable discussion with state, business and local leaders region to highlight her Executive Order that creates the nation’s first moratorium on new hyperscale data centers signed last week.
The Executive Order temporarily pauses state environmental permits for up to one year in order to build a nation-leading regulatory framework for data centers that protects ratepayers, the environment, the energy grid and communities across the state. The governor's order sets strong standards for data center development with a goal of creating a blueprint to support localities.
“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,” said Gov. Hochul during her visit. “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.”
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 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.
Finally, Gov. Hochul is pursuing legislation to repeal sales tax exemptions for massive data centers across the state.
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 Zellner
- Assembly Majority Leader Crystal Peoples-Stokes
- Assemblymember William Conrad
- Deputy County Executive Lisa Chimera, Erie County
- Fredonia Mayor Michael Ferguson
- Tonawanda Town Supervisor John Flynn
- North Tonawanda Mayor Austin Tylec
- Kenmore Mayor Patrick Mang
