New York is recommending that communities seek at least $1 million for every megawatt of utility demand associated with a proposed data center, establishing a statewide negotiating benchmark while leaving individual agreements voluntary. The Community Investment Framework released by Empire State Development is intended for local governments, municipalities and industrial development agencies negotiating with developers or operators.
The benchmark is not a statewide tax, fee or automatic payment. It is guidance for local negotiations, and the framework does not itself approve a project or override zoning and permitting rules. A locality hosting a proposed 100-megawatt project, for example, would begin from a recommended $100 million community-investment target, but the final amount and terms would still depend on a negotiated agreement.
Empire State Development organized the framework around four pillars: good-neighbor commitments; workforce and labor standards; transparency and accountability; and targeted investments. Suggested uses include public infrastructure, broadband expansion, child-care facilities, K-12 programs and blight remediation. The state also encourages communities to share completed frameworks so officials can develop a collection of best practices.
The guidance follows Executive Order 62, which Governor Kathy Hochul signed July 14. The order paused certain incomplete state discretionary permits for large data centers while the Department of Public Service develops a generic environmental impact statement. Local permits are not covered by that pause.
Why the benchmark is tied to power demand
The executive order defines covered data centers generally as facilities that can consume 50 megawatts or more, while excluding facilities primarily used for manufacturing, academic research, education or medical care. It says nearly 12 gigawatts of data-center load requests were in the New York Independent System Operator interconnection queue as of May, including more than eight gigawatts added during 2025.
State officials linked the per-megawatt formula to the scale of land, electricity and infrastructure required and to the sector’s relatively low number of permanent jobs per unit of demand. Empire State Development President Hope Knight said data centers differ economically from traditional manufacturing because they are not major local job generators, according to Reuters’ report on the framework.
The framework addresses local benefits, not the full cost of connecting a project to the electric system. The executive order separately directs state regulators to consider a Grid Acceleration Fund, upfront developer contributions, dedicated generation or storage, and protections against stranded infrastructure if a planned project is delayed, reduced or canceled.
The state’s July policy outline says the environmental review will examine energy demand, water use and quality, air quality, noise and effects on disadvantaged communities. Until that work is complete, the new framework gives local officials a common starting point—but no guarantee—for negotiating benefits from projects that may proceed after the state pause ends.
