The Midtown Gazette

A Columbia Journalism School newsroom covering Midtown Manhattan in the heart of New York City.


Advocates Warn Upstate Data Centers Could Raise NYC Electricity Costs

Con Edison utility truck parked on Seventh Avenue near Penn Station. Photo by Chujiao Zhang

As data centers become a flashpoint in this year’s elections, environmental and energy advocates say most New Yorkers still don’t realize why they should care, warning that these facilities could drive up their electric bills, even from miles away.

In July, Gov. Kathy Hochul signed an executive order pausing state permits for data centers that can draw 50 megawatts or more. It is the first statewide data center moratorium in the country, and now a centerpiece of her reelection campaign. But advocates and some state lawmakers say it doesn’t go far enough.

“In New York City, you’re just going to see all of those costs aggregate out across city residents,” said Graham Steinberg, an outreach and organizing associate at We Build Progress, a progressive policy nonprofit that helped design a new data center policy toolkit to support communities in responding to data center development.

On Sept. 24, about 70 advocates, organizers, policymakers, and policy experts gathered at Civic Hall at Union Square for “Communities Take Charge,” a Climate Week NYC event launching the toolkit. Organizers urged residents and local officials to establish rules around data centers before projects move ahead.

Steinberg said the toolkit gives communities “the language they need” to respond, since most residents still don’t realize data centers could boost their electric bills. “Most of these local officials working with data centers have signed NDAs,” he said.

Those nondisclosure agreements have made it hard for residents to figure out the details of those data centers until ribbon-cutting ceremonies, Steinberg added.

Although Midtown is far from the large data centers proposed upstate, residents and businesses there could still bear some of the burden through higher electric bills. Every Con Edison customer’s bill is split in two. They pay for the supply, which covers the electricity itself, and for the delivery, which includes building, maintaining, and operating infrastructure like poles, wires, and substations that bring power to customers. Taxes are then added on top.

Data centers can drive up both parts of the bill, as they demand enormous amounts of electricity. More demand on the grid raises supply charges because Con Edison buys energy on the open market. Data centers also need new infrastructure. Under current rules, those costs are passed on to other customers through delivery charges.

In June, New York’s average residential electricity price was 60.8% above the national average, according to the U.S. Energy Information Administration. In New York City, a typical household paid Con Edison $112.75 a month for electricity last year, compared with $75.38 in 2016. Those households used about half the power of the average American household but paid more than twice as much per kilowatt-hour.

State lawmakers passed the Responsible Data Center Development Act in June, which would pause permits for data centers of 20 megawatts or more for a year and require them to pay for the grid costs they create. As of late October, Hochul had neither signed nor vetoed it.

Assembly member Anna Kelles, D-Ithica, who helped pass the bill, called the order only a first step during a panel at the toolkit launch.

Kelles said the order applies only to data centers that use 50 megawatts or more, allowing projects between 20 and 50 megawatts to move forward, which she called one of the order’s most frustrating parts.

“Twenty megawatts is already a huge load,” Kelles said. That’s enough to power about 16,000 homes, according to U.S. Energy Information Administration data.

For some Midtown residents, electricity bills already weigh heavily on their finances. Yuanhao Lin, who shares a two-bedroom apartment in Hell’s Kitchen with a roommate, received a Con Edison bill this spring for about $1,900 over six months, or more than $300 a month. Delivery charges made up most of the bill. It was a sharp contrast to the roughly $60 a month he had paid for his previous studio in Long Island City.

Lin said he couldn’t figure out why the bill was so high and felt it was unfair. But facing the threat of a power shutoff, he paid the bill after filing a complaint with the state Department of Public Service and spending a whole day on the phone with Con Edison.

Lin knows about the data center debate, but doesn’t pay much attention to it. “I’m definitely worried it will make my bills even higher, but there’s nothing I can do,” he said.

Advocates said the purpose of promoting this toolkit isn’t to block data center development, but to inform and equip communities to make better decisions.

For those residents in communities like Midtown, Steinberg said, “You have to talk to your elected officials. You have to make them aware that your bills are going up.”