It all started innocently enough: When we asked where our stored electronic information went, we were told “the cloud. ”Sounds nice. Information stored in a puffy white setting. Of course, there is no information “cloud,” our data is stored in computers. Stored in computers that are housed all over the country – indeed sometimes the world.
The number of computers to store our data, process online transactions, and handle our internet information requests and computations, is incredible. With the rise of the use of A.I., so-called “artificial intelligence,” the projected demand for computer space and capabilities is mushrooming and accelerating.
With that demand comes the need for more and more access to computers, computers that are stored in massive buildings, and now being built all around the nation and at an increasing speed. Those computer buildings are known as “data centers” and their thirst for energy and water (for cooling) is virtually insatiable.
The construction and use of these data centers is driving a rise in utility rates all across the nation and New York is not immune. Indeed, recent government reports now expect a significant rise in energy based on an explosion in industry demands for more data centers and this will result in higher electricity prices. That’s of particular concern for renters, homeowners and small businesses, which are already struggling to pay their energy bills.
Given the “affordability” concerns and environmental threats that result from the massive growth in the number of data centers, New York policymakers must develop policies to protect the state.
So, what should they do? Here are six ideas.
First, insulate the public from getting stuck with the bill if the data center flops or falls short. New Yorkers have seen this movie before; when some “can’t miss” economic development program do miss. There are growing concerns that the need for these data centers is over-hyped. New York policymakers must demand that under no circumstances should a new data center be built using any public support until guarantees and claw-back provisions are contained in required contracts with state and/or local governments.
Second, those contracts must be made available to the public without redaction. One national review of data centers found that required permitting for data centers were shielded from public disclosures using the “trade secrets” exemption allowed under states’ public access laws. New York grants those too. It must not be allowed when granting public benefits of any kind to data center construction or use.
Third, among the provisions of any such agreement between government and data centers, there must be a provision of expected water consumption by the facility. There must be regular, ongoing monitoring and public reporting of whether such water use is being used as expected. Let’s not overlook the noise from these facilities; noise impacts should be carefully considered in the review process and contracts and permits must be in place to ensure the facilities operate quietly.
Fourth, not one residential utility ratepayer dollar should be – directly or indirectly -- used to subsidize the data center. New Yorkers already pay among the highest rates in the nation. Data centers are expected to need a fantastic amount of electricity; they must not be driving up utility rates for New Yorkers.
Fifth, every high-energy demand project’s infrastructure and operations should meet the highest current standards for energy efficiency and minimal environmental impacts – from energy consumption, to water use, noise and electronic waste creation. They should be obligated to meet regularly and upgrade their efficiency to meet ever evolving standards.
Sixth, not one electron from the existing grid should be used to power data centers. Another way to jack up utility rates is to subsidize data centers by diverting current electricity in the grid to power data centers. We have already heard the chorus that New York needs more power due to the rising need for electricity as the state moves away from relying on fossil fuels. Part of those estimates are boosted by the purported need for more and more data centers. If the owners of data centers want power, they should get their own. Moreover, whatever power they use must relying on “green” sources, not oil, coal, gas, or nuclear. New York should tell data centers “B.Y.O.R.E.” – bring your own renewable energy.
All across the nation energy costs have risen faster than inflation since 2022, with greater increases ahead. The causes include load growth from data centers, increasing electric transmission and distribution infrastructure and maintenance costs, extreme weather, and supply chain disruptions.
There is little we can do in the near term about the expenses resulting from protecting the grid from extreme weather and rising heat that are the products of a worsening climate. But data center costs – both financial and environmental – must not be part of the mix.
New York already has data centers and other energy “hogs.” But we have not yet experienced the explosion of data center construction and energy use seen in other parts of the nation. We should learn from those other experiences. As ratepayers, we should demand policymakers act on our behalf, not Big Tech’s.
Blair Horner is senior policy advisor with the New York Public Interest Research Group.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.
