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The bill awaits Gov. Hochul's signature after passing the state legislature
New York lawmakers have approved a bill imposing new labor, energy, environmental, and community-benefit requirements on datacenters, including a one-year moratorium on certain permits for facilities drawing 20 MW or more.
The bill now heads to New York Gov. Kathy Hochul for a signature. A spokesperson for the governor told the New York Post she would review the legislation, but gave no signal as to whether she would sign it. Hochul has previously said she hoped to leave regulating datacenter construction to the local communities.
“Today we face an unprecedented wave of proposed large-scale data center development across New York,” the bill’s sponsor Assemblymember Anna Kelles wrote in a statement posted to Instagram. “My legislation seeks to provide New York with the time necessary to fully evaluate the environmental, energy, water, and ratepayer impacts of these facilities and to develop appropriate regulatory safeguards before additional projects move forward.”
The Assembly approved the bill on Thursday, the same day Anthropic, the AI giant behind Claude, called for a pause on LLM development sprints as developers believe the models could soon be capable of building themselves. In light of that possibility, researchers at Anthropic said the world would benefit from a slowdown in the race to make models more powerful.
In New York, lawmakers hope to protect consumers from higher energy bills by creating a special classification for datacenter electrical customers and mandating that all necessary infrastructure upgrades, administrative expenses, and operational costs be assigned entirely to the datacenter.
The bill also outlines electricity-sourcing requirements for datacenters with a peak load of at least 5 MW, requiring a phased shift toward renewable energy, with one-third of electricity coming from renewable sources between 2030 and 2034, two-thirds between 2035 and 2039, and 90 percent from 2040 onward.
For trade workers who are employed to build the facilities and maintain the buildings later, the bill requires the datacenters to meet prevailing wage requirements, unless the workers are operating under a collective bargaining agreement. Additionally, it demands datacenter companies help host communities with renewable energy initiatives, and mitigate the strain on local wastewater treatment facilities.
Business leaders are urging Hochul to reject the bill, saying it was rushed through at the end of a legislative session and presented without appropriate debate.
In a statement provided to The Register, Julie Samuels, president and CEO of Tech:NYC, which promotes the state’s technology industry, said a blanket moratorium on datacenters would slow investment in the next generation of infrastructure projects.
“Energy usage, grid capacity, and the community impact of data centers must be addressed, and the Governor’s Public Service Commission is already pursuing the right approach by ensuring data centers pay their fair share for grid upgrades and energy usage,” Samuels wrote in a statement.
Republican Assemblymember Phil Palmesano argued that datacenters were being unfairly targeted when other technology companies were given tax incentives to build, pointing to the recent groundbreaking of the Micron chip fab in Clay, New York, which is expected to create 50,000 New York jobs throughout construction, and up to 90,000 nationally.
The bill, approved by the Senate on Friday, includes carve-outs for certain industrial computing applications, including manufacturing.
“If we told Micron they had to power their energy demands strictly using renewable resources, they wouldn’t be here,” Palmesano said, according to the NY Post.
One of the first drafts of the bill had called for a three-year pause on datacenter construction. ®
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