BILL NUMBER: S6394A
SPONSOR: GONZALEZ
 
TITLE OF BILL:
An act to amend the public service law, the public authorities law and
the energy law, in relation to regulation of energy consumption by data
centers
 
PURPOSE:
The purpose of this bill is to ensure that data centers do not negative-
ly impact the communities within which they are built and ensure that
New York State is able to continue promoting cutting-edge technology
while simultaneously reaching its climate goals set out in the Climate
Leadership and Community Protection Act.
 
SUMMARY OF PROVISIONS:
Section 1. Title.
Section 2. Legislative intent and findings.
Section 3. Amends the environmental conservation law. Requires operators
of data centers to disclose projected information regarding the data
center's location and organization, use of labor, energy usage, green-
house gas emissions, waste heat, water usage, and water pollution prior
to construction of the data center. Additionally requires operators of
data centers to hold public hearings prior to submitting their data
disclosure reports. Furthermore, requires data center operators to
submit annual updated reports regarding their efforts to reduce emis-
sions, energy consumption, waste heat, and water usage, and their
efforts to protect the public from water pollution and scarcity.
Section 4. Amends the public authorities law to authorize the authority
to determine reasonable energy consumption effectiveness goals for the
creation and operation of data centers.
Section 5. Amends the energy law. Disallows utility providers from
providing economic incentives or discounts for fossil fuel power
purchase agreements. Requires by 2030, at least one-third of all energy
used by data center operators must come from renewable energy sources,
achieved through exclusive power purchase agreements for renewable ener-
gy, at least two-thirds renewable energy by 2035, and by 2050, all ener-
gy used by data centers must be provided through power purchase agree-
ments for renewable energy. Authorizes the public service commission to
create a community discount plan to counteract increased energy costs
for regular customers due to a new data center's operations.
 
JUSTIFICATION:
In 2021, data center operations accounted for around 1.8% of electricity
use in the United States, roughly equivalent to the electricity consump-
tion of the entirety of New Jersey. The expansion of artificial intelli-
gence has caused and will continue to cause increased demand for the
already rapidly growing use of data centers. In the age of climate
change, artificial intelligence exacerbates our need for energy as it is
much more energy-intensive than typical cloud-based applications. For
example, a ChatGPT query needs almost 10 times as much electricity as a
Google search.
Additionally, approximately 0.5% of total U.S. greenhouse gas emissions
could be attributed to data centers in 2021, and this number is project-
ed to increase tenfold by 2040. However, recent outside reports have
estimated that big tech companies have underreported their emissions and
that the real emissions are about 7.6 times higher than reported. This
underreporting is partially due to Big tech companies' use of third-par-
ty data centers from whom they rent data capacity, as Big tech companies
do not attribute the emissions caused by third-party data centers to
themselves.
This increasing prevalence of data centers and the lack of disclosure
from data center operators pose an extreme threat to the climate goals
in the Climate Leadership and Community Protection Act. New York State
has set a target of reducing greenhouse gas emissions from 1990 levels
by 40% by 2030. Not only will the creation of more data centers cause
additional energy usage and emissions, but their lack of transparency
surrounding such emissions will directly interfere with New York State's
attempts to counteract those emissions and meet its climate goals.
This bill further aims to encourage data center operators to use renewa-
ble energy to operate data centers. Big tech data center operators
currently claim to be carbon neutral, partially through purchasing
renewable energy certificates. These certificates prove that Big tech
companies are buying renewable energy-generated electricity, but they do
not require the companies to use that electricity to power their facili-
ties. Big tech companies use this loophole to use vast amounts of fossil
fuel. This bill requires each operator to directly power its data
centers with renewable energy in amounts that align with New York
State's climate goals.
Lastly, because of data center growth, New York utilities may need to
increase annual energy generation between 7% to 26% above 2023 levels to
meet demand. This demand increase will directly affect the average
consumer, causing customer bills to increase incrementally each year
through 2032. Without considering data centers, customer electricity
bills increase annually by 79%, and data center operation will cause an
additional 1-2% increase yearly. Similar energy hikes have been seen
across the U.S., with data centers not paying for their fair share of
energy usage in states such as California. In Santa Clara, California,
data center operation accounted for 82% of the city's electrical bills
in 2023, but the burden of that electricity usage fell upon Santa Clara
residents and small businesses. This bill aims to protect New York State
customers from these bill hikes by providing utility discounts to commu-
nities within which new data centers are created.
 
LEGISLATIVE HISTORY:
New bill
 
FISCAL IMPLICATIONS:
N/A
 
EFFECTIVE DATE:
90 days after the bill becomes law.

Statutes affected:
S6394A: two public service law