New York Proposes $1 Million per Megawatt Community Investment for Data Centers

Sept 15 (Reuters) - According to a document released on Tuesday, New York Governor Kathy Hochul is recommending that local governments request community investments of at least $1 million per megawatt from developers proposing new data centers.

Her recommendations follow by several months New York's move to become the first U.S. state to impose a moratorium on large new data centers.

The document states that suggested investments of at least $1 million for every megawatt of utility demand would help communities where the data centers are built "share equitably in the long-term economic value created by these projects."

Representatives for Amazon, Meta and Alphabet's Google, among the world's largest data center developers, did not immediately respond to requests for comment. Microsoft declined to comment.

"The innovation economy's growing demand for data centers must be matched by shared standards that ensure communities benefit," Empire State Development President Hope Knight said in a statement.

"Because data centers are not major local job generators, their economic development profile differs from traditional manufacturing."

The expansion of data centers in the United States is driving up power demand and electricity bills in large parts of the country, drawing local and bipartisan political backlash.

Texas Governor Greg Abbott, a Republican leading one of the world's fastest-growing regions for artificial intelligence infrastructure, directed state regulators on Monday to penalize data centers that fail to disclose details about their water consumption.

A recent Reuters/Ipsos poll found that just one in three Americans approve of how quickly data centers are being built, while most would oppose construction of one in their own community.

A spokesperson for House Speaker Mike Johnson said Republican lawmakers in the U.S. House of Representatives plan to introduce legislation aimed at limiting electricity bill increases linked to data center expansion.

Similar bills have been introduced by legislatures in dozens of U.S. states.