Why developers come here
New York’s appeal is split in two. Downstate, Manhattan and the New York City suburbs are a legacy colocation and financial-services market where power is scarce and expensive. Upstate is where the AI-era interest is: Niagara hydro, retired coal and gas plant sites with existing 345 kV interconnections, cold weather that cuts cooling costs, cheap land, and industrial electricity that averaged 10.14 cents per kWh statewide in the first half of 2026 (EIA), with lower prices available in NYISO’s western zones.
The proof point is TeraWulf’s Lake Mariner campus in Barker (Niagara County), a former coal plant site with dual 345 kV lines, where Fluidstack has leased hundreds of megawatts backstopped by Google. Stream Data Centers proposed a $19.5 billion, 2.2 million square foot campus at the STAMP site in Genesee County.
The interconnection queue tells the story: NYISO went from six large-load projects totaling 1 GW in 2022 to 48 projects and about 12 GW at the end of 2025, most of them data centers and most in upstate zones D, E, and H. Then, on July 14, 2026, the state paused new large data center permitting.
Incentives
- Sales tax exemption for internet data centers (Tax Law 1115(a)(37) and 1115(y)). Enacted in 2000, this exempts machinery, equipment, software, racks, cooling, generators, power conditioning, raised flooring, cabling, fire suppression, and related installation and maintenance services purchased by an operator of an “internet data center,” defined as a high-security facility that provides uninterrupted internet access to customers’ web pages and continuous management of traffic (Tax Bulletin ST-405). There is no investment or job threshold and no sunset; operators use Form ST-121.5. The state estimated its cost at $12 million in 2026, but Stream’s STAMP application alone sought about $716 million in state sales tax relief. Governor Hochul has proposed repealing it, and repeal bills (including S9288) are pending; as of this writing the exemption is in effect.
- Property tax. No statewide exemption. County and town Industrial Development Agencies negotiate PILOTs and sales and mortgage recording tax abatements project by project under General Municipal Law Article 18-A; the Genesee County EDC’s package for Stream (roughly $1.46 billion in abatements plus about $285 million in PILOT and host payments) is among the largest ever proposed in the state.
- NYPA power. The New York Power Authority allocates low-cost hydropower to economic development projects; Governor Hochul has said publicly she prefers to steer it to Micron’s chip fabs rather than data centers, and a pending bill (S9182B) would restrict allocations to data centers.
- Executive Order 62 (July 14, 2026). Directs the Department of Environmental Conservation to hold in abeyance all incomplete applications for discretionary permits for construction or expansion of a data center of 50 MW or more, until DEC completes a Generic Environmental Impact Statement developed with the Department of Public Service, expected to take up to a year. Facilities primarily for manufacturing, research (including quantum computing), education, or medical care are excluded; local permits are not affected. The legislature separately passed the Responsible Data Center Development Act (A11560/S10642) with a one-year moratorium at a 20 MW threshold, renewable and labor standards, and host community benefits; it awaited the governor’s signature.
Power
New York has its own grid operator, NYISO. National Grid serves most of upstate including Niagara and Genesee counties; NYSEG and RG&E (Avangrid) serve the Southern Tier, Finger Lakes, and Rochester; Con Edison serves New York City and Westchester; the state-owned New York Power Authority owns the Niagara and St. Lawrence hydro plants and the main 345 kV backbone.
Loads above 10 MW connecting at 115 kV or higher (or above 80 MW at lower voltages) go through NYISO’s large-load process with a system impact study; smaller loads use the utility’s own procedures. NYISO is rewriting the process during 2026 to shorten studies, define milestones for inclusion in planning, and clarify modifications, with a target of a FERC filing in December 2026. In February 2026 the Public Service Commission opened the Energize NY Development proceeding to redesign large-load cost allocation, interconnection, and tariff structures, with a staff white paper to follow; no statewide large-load tariff has been adopted yet.
Downstate is capacity-constrained. Con Edison’s Zone J peaked near 10,000 MW in 2024, and the utility has revised its interconnection principles so large loads face the same substation, breaker-failure, and under-frequency load-shedding requirements as generators.
Where the projects are
Western New York is the center of gravity: Lake Mariner in Barker (Niagara County, tracked on this site), the STAMP site in the Town of Alabama (Genesee County), and the Buffalo-Niagara hydro corridor generally. The Finger Lakes have the Lansing plant site in Tompkins County. Downstate activity is incremental expansion of existing colocation in Manhattan, Long Island, and the Hudson Valley rather than new campuses.
Local politics
The STAMP fight defined 2026. Supporters, including Laborers’ Local 435, cited thousands of construction jobs, 125 permanent positions, private funding of electrical infrastructure, and PILOT revenue. Opponents, led by the Tonawanda Seneca Nation, the Sierra Club, and a local resident, cited noise audible for miles, wetlands and stormwater impacts on the adjacent reservation and the Iroquois National Wildlife Refuge, grid strain, and the size of the subsidy; they sued in July 2026 to void the 2012 incentive zoning agreement between the town and the Genesee County EDC. The executive order appears to halt Stream’s DEC permits.
Governor Hochul framed the moratorium as protecting “large job-creators” like Micron, saying data centers create far fewer permanent jobs per megawatt. Business groups and some upstate officials warned the pause could cost the state grid investments that developers had offered to fund. Niagara County has welcomed TeraWulf, whose Lake Mariner project reuses a coal site and predates the order.
What a landowner should know
For at least the next year, any new project of 50 MW or more that needs a DEC permit (wetlands, air, stormwater for large sites) is frozen, so expect option agreements rather than closings. Developers upstate have sought 100 to 500 acres near a 115 kV or 345 kV line, a retired plant site, or a shovel-ready park; downstate, only existing industrial buildings with power are realistic.
Local approvals still run through town planning boards and county IDAs, and IDA hearings on PILOTs are where opposition organizes. Ask whether the site is in a NYISO zone with headroom (western zones A through E) or a constrained one (J and K), and whether the project counts on NYPA hydro, which is increasingly unlikely.
The state agency is Empire State Development; the Public Service Commission’s Energize NY Development proceeding and NYISO’s large-load process will set the interconnection rules that apply once the moratorium lifts.