On September 15, 2026, NYS Governor Kathy Hochul announced the release of the state’s Host Community Investment Framework (CIF) for Data Center Development. Just two days later, on September 17, the New York State Public Service Commission (Commission) issued a positive declaration and draft scope in accordance with the State Environmental Quality Review Act (SEQRA) associated with its review of the interconnection of large electric load customers—including data centers—in the Energize NY Development proceeding. As of August 2026, there are over 14 gigawatts (GW) of large load development projects that have requested interconnection to the state’s electrical grid.
Initiated in February 2026, the Energize NY Development proceeding is part of the governor’s initiative to ensure that ratepayers are protected from the potential impacts of large electric load projects. Through this proceeding, the Commission is charged with reviewing interconnection processes, cost allocation, and tariff structures relating to the integration of large loads with the state’s transmission and distribution systems. Both actions cited above come three months after the governor signed Executive Order No. 62, which put in place a first-in-the-nation, statewide moratorium on the issuance of discretionary permits for data centers by the Department of Environmental Conservation. Together, last week’s rollout by Empire State Development (ESD) of the CIF and the Commission’s SEQRA actions mark significant steps forward in fulfilling the requirements of Executive Order No. 62 and the state’s progress towards developing a comprehensive framework for data center development.
Energize NY Development Proceeding: Positive Declaration and Draft Scope
Executive Order No. 62 directed the Department of Public Service (DPS) and the Commission to initiate a formal public process for the preparation of a Generic Environmental Impact Statement (GEIS) under SEQRA to assess the potential environmental impacts of the proposed actions contemplated in the Energy NY Development proceeding: the development and promulgation of interconnection processes and cost-allocation standards for large electric load customers (including data centers), the implementation of these proposed interconnection reforms, and the construction and operation of large-load data centers within the state. By issuing a positive SEQRA declaration, the Commission has taken the first procedural step in the process of preparing the GEIS and has concluded that the proposed actions may have significant adverse impacts on the environment.
Simultaneously with the issuance of the positive declaration, the Commission issued a Draft Scope for the GEIS for public review and comment. In general, a draft scoping document identifies the potentially significant adverse impacts that may be considered in the GEIS, eliminates irrelevant issues, and preliminarily discusses potential mitigation measures and alternatives. Unsurprisingly, the Draft Scope indicates that the GEIS will assess potential impacts typically associated with most development projects—impacts to land; surface water resources; groundwater resources; floodways and floodplains; air quality; plants and animals; agricultural resources; aesthetic, archaeological, and historical resources; transportation systems; energy use; noise; odor; light; human health; open space and recreation areas; achievement of the climate goals outlined in the Climate Leadership and Community Protection Act (CLCPA); community land-use plans; existing community character; and disproportionate impacts on disadvantaged communities. However, the Draft Scope notably excluded impacts to geological features. More specific to the proposed actions contemplated in the Energy NY Development proceeding, the Draft Scope indicates that the GEIS may also consider policy mechanisms, such as capacity-based charges; bring-your-own generation or storage models; grid flexibility and curtailment; tariff modifications to protect against financial risk; and thermal-energy storage and other beneficial uses of waste heat.
Comments to the Draft Scope are due by 4:30 p.m. on October 20, 2026, in Case 26-E-0045.
Community Investment Framework
To assist NYS localities in “analyzing and attaining local economic benefits and mitigating potential negative effects of serving as a host community for a data center,” Executive Order No. 62 also directed ESD to create and post a CIF on its website within 60 days of the executive order’s issuance. The CIF establishes a voluntary mechanism for local communities to use as a baseline for negotiations with developers of large-load projects while giving them the ability to tailor commitments from data centers to reflect individual host community needs. The CIF focuses on local community issues, such as property tax revenue, construction labor impacts, environmental impacts, and site and energy usage. The CIF, among other things, recommends a community investment benchmark of $1 million per MW of demand to create a Community Investment Fund that could be used for enforcement of agreements with developers, mitigation, or remediation.
What Do These Recent Actions Mean for the Data Center Moratorium?
Executive Order No. 62 directed the following:
- DPS to prepare the GEIS
- Empire State Development to establish a CIF
- DPS to consider ratepayer protection mechanisms
- DPS to identify and resolve issues related to interconnection and transmission impacts
- DEC to assess their policies, regulations, and guidance to determine whether amendments or supplements are necessary to reflect the water demands of large consumers, including data centers
With the first directive officially underway and the second directive complete, significant steps are being taken towards establishing the regulatory and investment framework contemplated by Executive Order No. 62. Following the public comment period on the Draft Scope, the Commission will adopt a Final Scope that defines the issues to be addressed in the GEIS. When Executive Order No. 62 was announced, Governor Hochul indicated that she expected this process to take up to one year.
If you have any questions regarding the content of this alert, please contact Brenda Colella, Regulatory Practice Area co-chair, at bcolella@barclaydamon.com; Lauryn Fulton, associate, at lfulton@barclaydamon.com; or another member of the firm’s Energy or Regulatory Practice Areas.