New York is trying to strike a balance between economic development, grid stability and affordability as potential new large load customers look for electricity.

The Public Service Commission on Feb. 12 initiated a proceeding to address large load interconnection reforms (26-E-0045).

It grows from Gov. Kathy Hochul’s (D) announcement of the Energize NY Development initiative in her Jan. 13 State of the State address, which stipulates that any project causing exceptional power demand must also create exceptional benefits to the state, or else cover the costs it imposes on the grid or supply its own energy.

The PSC order pertains to all large loads but notes data centers often do not promote the same degree of economic development or job creation as other facilities drawing large amounts of electricity.

The PSC is trying to accomplish several things as it crafts a proposed reform:

• • Modernize the interconnection process for all building loads.
  • Improve transparency and predictability related to grid upgrades.
  • Ensure that data centers and similar facilities bear the costs they impose on the electric system.
  • Provide for the continued reliability of the electric system.
  • Develop programs and policies for the interconnection of large loads that consider the objectives of the state’s landmark Climate Leadership and Community Protection Act (CLCPA).
  • Explore ways new large electric loads could lead to downward pressure on rates for all customers.

Beneath those objectives are a set of factors that are complex to address individually, let alone balance as a whole.

New York already has some of the most expensive electricity in the nation, its power generation and transmission infrastructure is aging, portions of the state are an economic backwater in need of new industry, and the CLCPA imposes a series of environmental and social justice considerations that are supposed to factor into decision-making.

The NYISO interconnection queue gained 8.3 GW of new load requests in 2025 and presently contains 11.9 GW attributed to future large load projects. The PSC noted the uncertainty of these numbers due to possible speculative or duplicative requests.

Hochul’s Feb. 12 news release said there were 48 large load projects in the NYISO queue in January and added: “The saturation of these projects in the interconnection queue, without clarity as to which projects will actually proceed to construction, increases uncertainty and complicates electric system planning and investment decisions.”

The PSC said the “beneficiary pays” model it uses when grid upgrades are needed to directly benefit a new customer is in alignment with state Public Service Law. But given the unprecedented load growth being projected, the PSC found it necessary to take steps to protect ratepayers from the costs that would follow.

Separately in New York, not even a week earlier, Democrats in the state Legislature proposed a data center moratorium to give time to better understand the issues involved and draw up policies in response. (See Data Center Moratorium Bill Introduced in N.Y. Legislature.)

Regulators and lawmakers in many other jurisdictions have reached similar conclusions in recent months.

The PSC order notes that approaches elsewhere have included long-term contractual agreements, capacity-based charges, bring-your-own-generation and higher electricity rates.

Some of these are listed as possible approaches in New York, along with flexibility/curtailment requirements, modified cost-sharing and cost-recovery rules, long-term contracts and ratepayer protection charges.

The PSC invited public comments, ordered a technical conference and directed staff at the Department of Public Service to draw up a briefing on the issues involved with large load interconnection.

“New York will continue to lead in attracting new technologies, but we must also grow responsibly, ensuring affordability comes first and those profiting from data growth pay their share,” Hochul said. “To prevent rising costs for everyday consumers, the state will enforce a simple standard: These industries must cover the costs of their expansion as it relates to utilities — just the same way it works for everyday consumers.”