New York Lawmakers Pass One-Year Permitting Ban for New Data Centers

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Written by Danny Levin, Deputy Editor on IIR News Intelligence (Sugar Land, Texas)

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Summary

New York lawmakers passed a bill pausing new permits for data center construction in the state for one year, although it is unclear whether Governor Kathy Hochul will sign it.

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New York's Proposed Data Center Moratorium

On the final day of the state's legislative session on June 4, New York lawmakers passed a bill that would pause permits for new data center construction in the state for one year, although Governor Kathy Hochul has indicated she may not be in favor of such a move.

According to Industrial Info Resources data, there are $28 billion worth of active and planned data center projects across New York, although nearly all of the activity is in the pre-construction phase. However, $23 billion worth of investment is attributed to projects that IIR assesses as having a medium-to-high (70%-99%) chance of moving forward as planned.

The governor has until December 31 to approve the bill now that the legislative session has ended. If she does not sign it by this date, the bill automatically does not become law. Hochul received the bill June 4 and can sign or veto it at any time in that window.

The omnibus bill--The Responsible Data Center Development Act--includes a one-year pause on new permits for data centers with more than 20 megawatts (MW) of capacity, but a prior bill proposed a three-year ban. It was scaled back due to concerns from building trade unions and business groups regarding potential construction job losses and economic competitiveness.

Supporters say the state should consider regulations amid a raft of concerns such as high energy and water consumption, environmental impacts and strained power grids that can increase bills for ratepayers. New York's grid primarily flows from upstate down to New York City.

The New York Independent System Operator (NYISO) has forecast that electricity demand could increase by an additional 1,600 megawatts (MW) to nearly 4,000 MW by 2030, largely due to large-load capacity such as data centers.

Those opposed say local municipalities should be able to make their own decisions, and pausing data center development could make New York hurt economically.

Other provisions in the bill include:

• Requiring public hearings before any new permit issuance
• Mandating the state's utility regulator create separate utility rate categories for data centers
• Setting strict labor standards to prevent construction job losses
• Mandating that all iron or steel used in data center construction is made in the U.S.

New York would be the first state to enact such a moratorium. Maine recently came close: Governor Janet Mills vetoed a bill that would have paused construction of new data centers in the state for 18 months. For more information, see May 4, 2026, article - Maine Lawmakers Fail to Override Governor's Veto of Bill Pausing Data Center Construction.

According to the National Conference of State Legislatures, lawmakers in 14 states, including Maine and New York, have introduced legislation to propose or consider bans and moratoriums:

• Georgia: Introduced
• Maryland: Failed
• Michigan: Introduced
• Minnesota: Failed
• New Hampshire: Failed
• Oklahoma: Failed
• Pennsylvania: Introduced
• South Carolina: Introduced
• South Dakota: Failed
• Vermont: Introduced
• Virginia: Continued for review
• Wisconsin: Failed

Governor Hochul's Stance is Unclear
Hochul has not taken a clear position on the permitting moratorium.

In late May, the governor told reporters, "This is a local decision for municipalities, its land use, which is the purview of local governments."

But she has also expressed a desire to protect ratepayers from high energy costs, ensure a strong power grid, and prevent planning uncertainty. This includes an initiative to modernize and reform NYISO's interconnection queue.

Non-profit research organization New York Public Interest Research Fund Group and environmental group Food & Water Watch, among others, urged the governor to sign the bill.

Meanwhile, The Data Center Coalition warned the bill would "undermine New York's economy, and send a signal that the state is closed for business," while Ken Pokalsky, the vice president of the Business Council of New York State, said in a memo that the "expansive and unworkable mandates proposed in this bill would result in significant adverse economic development impacts."

New York Data Center Construction
TeraWulf Incorporated is in the process of constructing the multi-building Lake Mariner artificial intelligence (AI) and high-performance computing (HPC) data center campus in Barker, outside of Buffalo, at the site of a former coal-fired power plant.

Two buildings, CB1 and CB2 are live, while CB3 (42 MW), CB4 (roughly 160 MW) and CB5 (roughly 160 MW) are expected to be connected to the state power grid this year, according to Data Center Dynamics.

The IIR Global Market Intelligence (GMI) Industrial Manufacturing Plant and Project databases offers more information on the Barker projects--including key contacts, capacities and necessary equipment--in detailed projects reports and a plant profile.

Google holds a roughly 14% equity stake in TeraWulf, representing a financial commitment of roughly $3.2 billion that in part directly supports the Lake Mariner expansion.

Stream Data Centers is proposing Project Double Reed--a three-building, 2.2 million-square-foot data center in the town of Alabama, about halfway between Buffalo and Rochester.

The path forward is unclear, however: Local residents and members of the Seneca Nation expressed strong opposition to the project in a public meeting in April. The Town of Alabama Supervisor said the town would carefully review the data center application. No timeline has been given yet on when a decision will be made.

Meanwhile, according to local news media, the Niagara Falls City Council voted June 3 to approve a settlement with Niagara Falls Redevelopment in order to end a years-long fight over whether vacant land can be used to build a $1.48 billion, up-to-nine-building center campus ("Niagara Digital Campus.") The city still must move forward with the application review process.

View a full list of active and planned data center construction across New York here.

IIR data show New York ranks 28th among all states in terms of active and planned data center project investment and number of projects, respectively.

Texas ($977 billion; 789 projects); Virginia ($422 billion; 709 projects); and Georgia ($317 billion; 441 projects) are the top three states for both investment and number of projects. Other states with more than $100 billion worth of investment include Arizona, Ohio and Pennsylvania.

The GMI Project and Plant databases offer a full list of detailed reports for projects mentioned in this article, and a full list of related plant profiles.

Key Takeaways

• New York lawmakers passed a bill pausing new permits for data center construction for one year.
• Governor Hochul has until December 31 to approve or veto the legislation, or it automatically is vetoed.
• $28 billion: value of active and planned data center projects across New York.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).