New York Proposes $1 Million Per Megawatt Data Center Fee

Governor Kathy Hochul recommended that local governments in New York require developers of large data centers to provide community investments of at least $1 million per megawatt of utility demand. The proposal, detailed in a framework released Tuesday, aims to prevent exploitative development and ensure local communities share in the economic value of projects that typically generate fewer jobs than traditional manufacturing.

These guidelines arrive during a year-long state moratorium on large data center construction. The framework suggests that funds be allocated to local infrastructure, including schools, roads, and public safety. It also recommends establishing good neighbor commitments to address noise, lighting, and local hiring priorities, alongside environmental concerns regarding water and energy consumption. Final development decisions will remain with local governments once the moratorium expires.

New York's move reflects a broader national trend of increasing scrutiny over the industry. In Texas, Governor Greg Abbott directed regulators to penalize data centers that fail to disclose water consumption. Simultaneously, U.S. House Republicans are planning legislation to address electricity bill increases linked to the rapid growth of data center infrastructure.