NY State Senate Bill 2025-S8037

Senate Bill S8037

2025-2026 Legislative Session

Establishes a datacenter utility rate classification, providing targeted congestion management incentives for upstate New York, and regulating off-grid power connections for datacenter operations

download bill text pdf

Current Bill Status - In Senate Committee Energy And Telecommunications Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 15, 2025	referred to energy and telecommunications

2025-S8037 (ACTIVE) - Details

Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Add §§66-x & 66-y, Pub Serv L; add Art 5 §5-105, Energy L

2025-S8037 (ACTIVE) - Summary

Establishes a datacenter utility rate classification, providing targeted congestion management incentives for upstate New York, and regulating off-grid power connections for datacenter operations.

2025-S8037 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S8037

SPONSOR: JACKSON
 
TITLE OF BILL:

An act to amend the public service law and the energy law, in relation
to establishing a datacenter utility rate classification, providing
targeted congestion management incentives for upstate New York, and
regulating off-grid power connections for datacenter operations

 
PURPOSE:

To establish a special rate classification for commercial datacenter
operations, provide targeted congestion management incentives for
upstate New York, and regulate off-grid power connections for datacenter
operations.

 
SUMMARY OF PROVISIONS:

  Section 1 amends the public service law by adding two new sections 66x
and  66-y  which classifies datacenter utility rates and their permitted
actions and, for the purposes of this section, defines "renewable sourc-

es" and "datacenter".

  Section 2 amends the energy law by adding a  new  section  5-105  that
authorizes  the New York state energy research and development authority
and the New York independent system  operator  to  develop  and  operate
datacenters in certain zones.

  Section 3 is the effective date.

 
JUSTIFICATION:

The  Datacenter  Tariff and Incentive Act aims to support the growth and
development of commercial datacenters in New York State by  establishing
a  special  rate classification and providing targeted incentives. Data-
centers are critical infrastructure for the digital  economy,  requiring
significant  and continuous electric load to operate servers and related
equipment. By offering competitive and nondiscriminatory electric rates,
the bill ensures that datacenters can operate efficiently  and  sustain-
ably. Additionally, the bill promotes the use of renewable energy sourc-
es  and  supports local employment through incentive programs. The regu-
lation of off-grid power connections ensures equitable contributions  to
state-mandated  clean  energy  and  public benefit programs, maintaining
grid reliability and  supporting  New  York's  clean  energy  goals.  By
requiring datacenters to procure 100% of their electricity from in-state
sources-at  least  50% from renewables, including manure-based anaerobic
digestion-the bill aligns with  the  Climate  Leadership  and  Community
Protection Act (CLCPA) and advances the state's transition to a zero-em-
ission electricity system.

 
LEGISLATIVE HISTORY:

New bill

 
STATE AND LOCAL FISCAL IMPLICATIONS:

N/A

 
EFFECTIVE DATE:
This act shall take effect immediately.

2025-S8037 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8037
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               May 15, 2025
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee on  Energy  and  Telecommuni-
   cations
 
 AN  ACT  to amend the public service law and the energy law, in relation
   to establishing a datacenter utility  rate  classification,  providing
   targeted  congestion  management  incentives for upstate New York, and
   regulating off-grid power connections for datacenter operations
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  public  service  law  is  amended  by adding two new
 sections 66-x and 66-y to read as follows:
   § 66-X. DATACENTER  UTILITY  RATE  CLASSIFICATION.  1.  EACH  ELECTRIC
 CORPORATION  OPERATING  WITHIN  THE NEW YORK INDEPENDENT SYSTEM OPERATOR
 (NYISO) SHALL, UPON ITS NEXT GENERAL RATE CASE FILING AFTER  THE  EFFEC-
 TIVE  DATE OF THIS SECTION, FILE WITH THE COMMISSION A TARIFF ESTABLISH-
 ING A SPECIAL RATE CLASSIFICATION FOR COMMERCIAL DATACENTER OPERATIONS.
   2. A DATACENTER WITH A PEAK DEMAND OF LESS THAN FOUR HUNDRED KILOWATTS
 (KW) SHALL NOT BE REQUIRED TO TAKE SERVICE UNDER THE  DATACENTER  TARIFF
 ESTABLISHED PURSUANT TO THIS SECTION.
   3.  A  DATACENTER OWNER OR OPERATOR WITH AN AGGREGATE STATEWIDE DEMAND
 OF ONE MEGAWATT (MW) OR GREATER SHALL BE REQUIRED TO TAKE SERVICE  UNDER
 THE  DATACENTER  TARIFF,  WHERE  SUCH  TARIFF  EXISTS  IN THE APPLICABLE
 SERVICE TERRITORY.
   4. SUCH RATE CLASSIFICATION SHALL:
   (A) PROVIDE FOR COMPETITIVE AND NONDISCRIMINATORY ELECTRIC  RATES  FOR
 QUALIFYING  DATACENTER  CUSTOMERS,  IRRESPECTIVE  OF THEIR ENERGY SOURCE
 PROCUREMENT MIX.
   (B) FACILITIES SEEKING TO QUALIFY FOR CONGESTION MANAGEMENT  OR  LOCAL
 EMPLOYMENT INCENTIVES UNDER SECTION 5-105 OF THE ENERGY LAW MUST, HOWEV-
 ER,  PURCHASE  ONE  HUNDRED PERCENT OF THEIR ELECTRIC ENERGY SUPPLY FROM
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11794-02-5
 S. 8037                             2

 
 GENERATION SOURCES LOCATED WITHIN THE STATE, OF WHICH A MINIMUM OF FIFTY
 PERCENT SHALL BE DERIVED FROM RENEWABLE SOURCES.
   5. FOR THE PURPOSES OF THIS SECTION, "RENEWABLE SOURCES" SHALL INCLUDE
 ENERGY  GENERATED FROM SOLAR, WIND, HYDROPOWER, GEOTHERMAL, AND BIOMETH-
 ANE, PROVIDED THAT SUCH BIOMETHANE  IS  DERIVED  FROM  MANURE  ANAEROBIC
 DIGESTION (AD) PRODUCED BY FARMS LOCATED WITHIN THE STATE.
   6.  FOR PURPOSES OF THIS SECTION, "DATACENTER" MEANS A FACILITY PRIMA-
 RILY USED TO HOUSE COMPUTING INFRASTRUCTURE FOR THE PURPOSE OF  PROCESS-
 ING,  STORAGE,  OR DISTRIBUTION OF DATA, TYPICALLY REQUIRING SIGNIFICANT
 AND CONTINUOUS ELECTRIC LOAD TO OPERATE SERVERS AND RELATED EQUIPMENT.
   § 66-Y. OFF-GRID POWER CONNECTIONS FOR  DATACENTERS.  1.  NO  ELECTRIC
 GENERATING  FACILITY  SERVING  A DATACENTER SHALL BE PERMITTED TO BYPASS
 PUBLIC PURPOSE FUNDING MECHANISMS, INCLUDING  BUT  NOT  LIMITED  TO  THE
 SYSTEM BENEFITS CHARGE, RENEWABLE ENERGY STANDARD, OR CLEAN ENERGY STAN-
 DARD  OBLIGATIONS,  BY ESTABLISHING A DIRECT OFF-GRID CONNECTION TO SUCH
 DATACENTER.
   2. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY  TO  ANY  DATACENTER
 MAJORITY  OWNED OR MAJORITY LEASED BY THE STATE OR ANY OF ITS INSTRUMEN-
 TALITIES, AUTHORITIES, OR AGENCIES.
   3. THE COMMISSION SHALL PROMULGATE RULES TO ENSURE  THAT  ANY  NEW  OR
 EXISTING  DIRECT  CONNECTIONS  BETWEEN  POWER GENERATORS AND DATACENTERS
 REMAIN SUBJECT TO EQUITABLE CONTRIBUTIONS TO STATE-MANDATED CLEAN  ENER-
 GY,  PUBLIC  BENEFIT,  AND  GRID  RELIABILITY PROGRAMS, UNLESS OTHERWISE
 EXEMPTED UNDER SUBDIVISION TWO OF THIS SECTION.
   § 2. Article 5 of the energy law is amended by adding  a  new  section
 5-105 to read as follows:
   §  5-105.  NYISO  CONGESTION INCENTIVES FOR DATACENTER DEVELOPMENT. 1.
 THE NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY  (NYSERDA),
 IN  COORDINATION  WITH THE NEW YORK INDEPENDENT SYSTEM OPERATOR (NYISO),
 IS HEREBY AUTHORIZED TO DEVELOP  AND  ADMINISTER  CONGESTION  MANAGEMENT
 INCENTIVES TO FACILITATE THE DEVELOPMENT AND OPERATION OF DATACENTERS IN
 NYISO  ZONES  A THROUGH H AND ZONE K. NO INCENTIVES SHALL BE MADE AVAIL-
 ABLE FOR PROJECTS LOCATED IN NYISO ZONES I, J, OR THE DOWNSTATE  REGION,
 INCLUDING NEW YORK CITY AND LONG ISLAND.
   2.  IN  ADMINISTERING  CONGESTION MANAGEMENT INCENTIVES, NYSERDA SHALL
 CONSIDER THE AVAILABILITY, COST, AND ALLOCATION  OF  NYISO  TRANSMISSION
 CONGESTION CONTRACTS (TCCS) IN THE RELEVANT ZONES.
   3. SUCH INCENTIVES MAY INCLUDE, BUT ARE NOT LIMITED TO:
   A.  TARGETED  CONGESTION  COST  MITIGATION  FOR FACILITIES MEETING THE
 RENEWABLE PROCUREMENT REQUIREMENTS  SPECIFIED  IN  SUBDIVISION  FOUR  OF
 SECTION SIXTY-SIX-X OF THE PUBLIC SERVICE LAW; AND
   B.  LOCAL EMPLOYMENT INCENTIVE GRANTS OR CREDITS, CONDITIONED ON MEET-
 ING MINIMUM EMPLOYMENT BENCHMARKS ESTABLISHED BY NYSERDA IN CONSULTATION
 WITH THE DEPARTMENT OF LABOR.
   4. INCENTIVES ESTABLISHED PURSUANT TO THIS SECTION SHALL ONLY BE  MADE
 AVAILABLE  TO  DATACENTERS QUALIFYING UNDER THE REQUIREMENTS OF SUBDIVI-
 SION FOUR OF SECTION SIXTY-SIX-X OF THE PUBLIC SERVICE LAW  AND  LOCATED
 IN ELIGIBLE NYISO ZONES.
   § 3. This act shall take effect immediately.

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