Less than a month after Gov. Kathy Hochul ordered state environmental regulators to pause certain pending permits for large data centers, lawmakers are pressing her to sign legislation that would impose a broader, one-year moratorium and establish additional requirements for the industry.
State Sen. Kristen Gonzalez (D-59) announced Aug. 11 that she would lead a statewide tour to build support for the Responsible Data Center Development Act. The bill passed both houses of the state Legislature on June 4 but has not been signed into law by Hochul.
“The tour itself will be, in part, an organizing tour to get this bill signed, but it’ll also center on the local fights that have been happening now across the state,” Gonzalez said.
The “New York Fights AI Data Centers” tour is scheduled to run from Aug. 22 through Aug. 30, with Food & Water Watch, a Washington, D.C.-based nonprofit organization, and other advocacy groups participating. Gonzalez plans to stop at town board meetings and forums in several communities, including Orangeburg and East Fishkill, where the Town Board recently approved a three-year moratorium on data centers.
The statewide debate is also beginning to reach towns in Columbia and Dutchess counties, where officials are considering whether existing zoning laws adequately address facilities that can require enormous amounts of electricity, water, and land.
Hochul’s July 14 executive order directed state environmental regulators to pause certain pending permits for large data centers while New York studies their effects on the electric grid, water supplies, and host communities.
But state lawmakers who backed the Responsible Data Center Development Act say their legislation would go further.
Assemblymember Didi Barrett (D-106), who sponsored the legislation, believes Hochul should still sign the bill and, according to her office, is working with Sen. Gonzalez, her colleagues, and advocates across the state to encourage Hochul to sign it.
“The Responsible Data Center Development Act includes several critical provisions not in the executive order,” said Barrett in a statement to the Herald. “Including a specific new rate class to protect ratepayers from the costs of building and operating data centers, support for robust host community benefit agreements, strong labor protections, and a more comprehensive environmental review to more fully understand the impact data centers have on our energy costs, natural resources, grid, and workforce.”
State Sen. Michelle Hinchey (D-41) said in a statement to the Herald that both measures are critical to giving New York time to understand the risks involved and, above all, protect ratepayers from higher utility bills.
“Tech companies are focused on profiting off the AI boom without regard for the communities around them, and as they push to build new data centers, New York is responding the right way,” Hinchey said in the statement. “The Governor has issued a nation-leading executive order, and we’ve passed the Responsible Data Center Development Act through both the Senate and Assembly. Both are critical to giving New York the time to understand the risks involved and, above all, protect ratepayers from higher utility bills. One measure I fought for — and applaud the Governor for including in her executive order — is the requirement that DPS consider establishing a fund to ensure that any grid upgrades needed to serve data centers are paid for by the companies themselves, not by ratepayers. That is a hugely important protection. At the same time, there are equally critical provisions in the Responsible Data Center Development Act that should be part of this effort. That includes establishing separate water and energy rate classes for data centers to ensure they bear the costs they impose on our systems, as well as a moratorium on hyperscale facilities of 20 MW or more, rather than the 50 MW threshold outlined in the executive order.”
How the Bill Goes Further
The legislation and Hochul’s executive order differ in several significant ways, beginning with the size of the facilities they cover.
The bill’s one-year moratorium would apply to data centers with a peak demand of at least 20 megawatts. Hochul’s executive order applies to data centers that consume, or are capable of consuming, at least 50 megawatts of electricity.
The legislation would impose a one-year moratorium on new permits issued by the state Department of Environmental Conservation. Hochul’s order instead directs the department to put on hold discretionary permit applications that had not been deemed complete before July 14. It does not apply to permits or approvals issued by local governments.
The bill would also require the creation of a separate utility rate class for data centers’ water and electricity use by June 1, 2030, intended to ensure that the facilities pay their full share of grid and water infrastructure costs.
Hochul’s order directs the state Department of Public Service to form a data center interconnection working group within 60 days and report within 90 days on how utilities assess the grid and cost implications of connecting large facilities.
The order also directs state agencies to develop guidance for investments in host communities, consider protections against electricity cost increases, and study whether existing water withdrawal regulations adequately address data centers’ demands. Those provisions would take the form of guidance rather than requirements.
Labor standards follow a similar pattern. The legislation would require data center construction to meet prevailing wage and collective bargaining requirements, include apprenticeship programs, and comply with Buy American requirements. Hochul’s order calls for guidance on similar issues that local governments could use when negotiating terms and conditions with developers as part of a broader community investment framework.
Renewable energy is addressed only in the bill. It would require data centers to use on-site renewable energy generation to meet as much of their energy demand as possible, with a target of phasing in 90% renewable energy by 2040 for all data centers.
The measures also differ in their requirements for public input. Under the bill, a public hearing would be required in the host town each time a large data center applied for a permit. Hochul’s order instead calls for public comment as the Department of Public Service prepares a generic environmental impact statement examining potential effects on energy demand, water use and quality, air quality, noise levels, and disadvantaged communities.
Both measures include exemptions for certain research facilities. The bill would not apply to data centers that are majority-owned or operated for research purposes, such as those used by universities or medical research institutions.
Hochul’s order exempts facilities used for manufacturing, research, including quantum computing and biomedical research, academic research, and medical care. It also exempts Empire AI, the consortium announced in 2024 to promote artificial intelligence research and development.
Data centers are among the most energy-intensive types of buildings, consuming 10 to 50 times as much energy per square foot as a typical commercial office building, according to the U.S. Department of Energy. As of May, nearly 12 gigawatts, or 12,000 megawatts, of proposed data center demand was in the New York Independent System Operator’s interconnection queue, according to Hochul’s order.
How Local Towns Are Responding
Although several area officials said such facilities appear unlikely to be proposed in their towns, officials in Columbia and Dutchess counties are beginning to consider whether their zoning laws need additional protections.
Ancram’s zoning law does not specifically address data centers. Supervisor Colleen Lutz said the town’s undeveloped land and relatively small population could still make it attractive to developers.
“An average center is about 100,000 sqft (2.5 acres), and we have large areas of undeveloped land in our town,” Lutz said in an email to the Herald. “I think that given our low population, leaders of this industry feel that they could get it passed with little opposition as compared to a more populated area.”
Lutz said a local moratorium would give the town time to study the potential effects and determine whether its zoning law should be amended.
“The natural resources within our community need to be protected,” Lutz said. “Families and farms rely on our sensitive aquifer, and we already struggle with water supply in some of our hamlets. Data centers rely on large volumes of water to assist with cooling the sensitive electronic equipment, so diverting water for this use could make our water scarcity worse.”
In Gallatin, Town Board member Jeff Jorve said officials plan to address data centers as part of the town’s ongoing zoning update. The facilities would be prohibited throughout most of the town but could potentially be considered in planned industrial districts through a special use permit.
“There’s a lot of steep slopes [in Gallatin],” Jorve said. “The places where they’re putting them tend to be quite flat and large holdings, and they have access to a lot of three-phase power. So the idea that someone would come in and put a data center in is a little bit impossible, but it’s not beyond the pale.”
Across the county line, Milan, Pine Plains, and Stanford have not taken formal action on data centers, although officials in all three towns expressed caution.
Stanford Supervisor Julia Descoteaux said the Town Board has not yet had a substantive discussion about data centers.
“The board is looking to gather more information on what is happening with data center development locally,” Descoteaux said in an email, “and is considering a moratorium on data centers in the meantime.”
Milan Supervisor Bill Jeffway said data centers are prohibited under the town’s current zoning law because they are not listed as an allowed use.
Pine Plains Supervisor Brian Walsh said a data center would require more electricity and land than the town could likely provide.
“Even with the school district, the mandated electric buses and everything, we don’t have enough power to supply for that,” Walsh said. “So I don’t know where a data center would fit into this category.”
Walsh said such a development could also conflict with efforts to preserve Pine Plains’ rural and agricultural character.
“Pine Plains is not going to get bought out by a data center, not up my alley, not happening,” he said. “We’re a rural farm community, and my goal is to stay with what we have, if not expand on the farming. That’s what we’ve always been and that’s what we always should be.”