New York offers Democrats a roadmap for data center fight

New York Gov. Kathy Hochul's first-in-the-nation data center moratorium could provide a playbook for other Democrats confronting one of the midterms' most heated issues.

Why it matters: Voters across the country are protesting data centers and looking for politicians to take decisive action to address concerns over the industry's rapid expansion.

Until now, no governor had imposed a statewide data center moratorium.

Hochul's approach — using executive authority while continuing to negotiate over broader legislation — could become a playbook for other governors.

Zoom in: Hochul went the executive order route in order to move as quickly as possible, her staffers say, while continuing to work with the New York legislature.

State Sen. Kristen Gonzalez recently pushed a data center moratorium bill through the New York legislature, but instead of signing that, Hochul took executive action.

Hochul's staffers said that Gonzalez's legislation raised more complicated policy questions that require further negotiation.

For example, Gonzalez said, negotiations will likely include clearer guidelines for public hearings.

Gonzalez told Axios that she's "really supportive" of Hochul's approach and worked with the governor's office because she agreed the state needed to act quickly.

The fine print: Gonzalez's bill goes further than Hochul's order. It would impact projects above the 20 megawatt level instead of 50, create new electric and water rate classes and require public hearings before future permits are approved.

Hochul's staffers say the governor wants to pair her executive order with legislation to ensure hyperscalers don't get tax benefits, while continuing to negotiate with Gonzalez on her bill.

Moratorium bills are cropping up across the country. Gonzalez said this will "certainly support" other governors considering proposals that are likely to make it to their desks.

Zoom out: The backlash isn't limited to blue states.

Texas Gov. Greg Abbott (R) recently called for banning new AI data centers in rural neighborhoods and to require the industry to shoulder more of its infrastructure costs.

Between the lines: Hochul is toeing the line between companies and voters, and acting fast without shying away from language viewed by some other Democrats as too politically charged.

"Now, no one can accuse New York of fearing innovation," Hochul said at a signing ceremony on Tuesday.

"But that said, a lot of Americans — for a lot of them, the specter of unchecked AI brings up fear, anxiety, a lot of worry."

Hochul and President Trump have aligned around efforts to have companies pay for the energy they demand.

The intrigue: Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) thrust the idea of a data center moratorium into the national spotlight earlier this year with legislation that would have paused new projects nationwide.

Sanders on Tuesday noted the idea, once "radical," is becoming a reality in places like New York.

The Sanders-AOC proposal went even further than Gonzalez's bill, and would lift the ban only after Congress passed sweeping AI safety legislation covering issues from civil rights to consumer protection.

The bottom line: Whether New York proves to be an outlier or becomes a model, Hochul has given governors a new playbook for responding to the data center backlash. ...