New York State Senate Bill S10642, set to be presented to NYS Governor Kathy Hochul, takes aim at data center development. If signed into law, the legislation would impose a one-year moratorium on all permits issued by the New York State Department of Environmental Conservation (DEC) for large data centers with a peak load of 20 MW or more.
The bill would require the DEC to produce an Environmental Impact Report that recommends new legislation and regulations necessary to mitigate potential environmental impacts of data center construction and operation. The legislation specifies that the DEC should consider how data centers could affect electricity and water consumption, land use, pollution, impacts on health, and other matters.
Other key requirements in the bill include:
- Renewable Energy. New and existing data centers having a peak load of 5 MW or more must procure at least the following percentages of their electricity consumption from renewable energy systems: 33.33% for years 2030–2034, 66.66% for years 2035–2039, and 90% for years 2040 and after.
- New Service Classifications for Data Centers. The bill would require that electric corporations, gas corporations, and water municipalities establish new classifications of service for large data centers. Large data centers would be required to bear the full cost of any infrastructure necessary to connect their facilities to these utility systems.
- Energy Efficiency Goals. The state would work to determine reasonable energy consumption efficiency goals for the design and operation of data centers. These goals would align with benchmarks set by the Climate Leadership and Community Protection Act (CLCPA).
- Host Community Benefits. Large data centers would have an obligation to improve local infrastructure and mitigate any harmful impacts on the communities that host their operations.
- Labor and Materials. Data centers would need to be constructed using labor paid at prevailing wages, using apprenticeship programs, and in whole or substantial part with domestic steel.
Once the bill is delivered, Governor Hochul will have 10 days to: 1) sign the bill into law, causing the data center moratorium to go into effect immediately; 2) propose a chapter amendment for certain aspects of the bill; or 3) veto the bill and return it to the senate with a statement of the reason for disapproval.
Barclay Damon’s Data Center & Digital Infrastructure Team attorneys will continue to monitor this legislation and provide further updates.
If you have any questions regarding the content of this alert, please contact Kevin McAuliffe or Matt Moses, Project Development Practice Area co-chairs and Data Center & Digital Infrastructure Team co-leaders, at kmcauliffe@barclaydamon.com and mmoses@barclaydamon.com, or another member of the firm’s Project Development or Energy Practice Areas or Data Center & Digital Infrastructure Team.
Reid Patchett, summer associate (not admitted to the practice of law), contributed significantly to the preparation of this alert.