BY ROBERT HORNAK | rahornak@gmail.com
New York is facing a major energy crisis, and as usual NY politicians are planning small instead of thinking big.
In the final days of the legislative session both chambers of the legislature passed the Responsible Data Center Development Act, a one year moratorium on building data centers in NYS.
The concern is that there isn’t enough power being generated in NY and the competition for this increasingly precious resource will cause prices to skyrocket – even more than they have already.
It’s a legitimate concern, but as they often do our elected officials are sticking their collective fingers in the dyke of progress hoping that it won’t burst on everyone. But you can’t hold back progress for very long, as history proves over and over again.
Data centers power AI, and electricity powers both. You can’t have one without the others, but NY is making no plans to actually meet the growing demand, which has been affecting prices over the last decade. According to Statista, statewide New York residential customers paid an average of 18.54 cents per kilowatt-hour. In 2025 that increased to 26.50 cents per kilowatt-hour, a 43% increase in just one decade.
There are many reasons for this increase, but the main reason is bad choices made in Albany. Prematurely shutting down the Indian Point nuclear reactor, which supplied 25% of NYC’s electricity, was one. Making offshore wind – which is 3.5 times more expensive then natural gas – the focus for future energy production for the state, is another.
According to the Empire Center, NY’s energy is the 8th highest in the U.S. and exceeds the national average by 49%. In just 2025, electricity prices in New York rose by 7.1 percent. Significantly outpacing the rate of inflation.
When asked about the Responsible Data Center Development Act, Gov. Hochul said, “It’s not fair to ratepayers in our state to have to have the higher costs because of a data center coming in.” She’s right, but New Yorkers are already paying much higher rates due to bad decisions by Hochul and Democrats in Albany.
What’s also not fair is to deny the people of NY the jobs that come from new technologies and the chance to lead in the critical transition rather than trail behind. And that is exactly what Democrats are saying – no new jobs for you. Make do with the old ones. That’s akin to telling New Yorkers, just keep making buggy whips, somebody will need them.
The site of the former Tonawanda Coke factory in Erie County was supposed to become the home of a 495,000-square-foot AI data center constructed by the Riverview Innovation & Technology Campus, but those plans are now on hold. County Executive Mark Poloncarz has vowed that the Erie County Industrial Development Agency will provide absolutely no tax breaks for data centers while he holds office.
There will be no innovation in technology for Erie County.
The concept here is simple, and one taught in every economics class. Supply and demand. This is a concept that Democrats seem to struggle with.
New York’s energy system was broken before AI and data centers got here. We should not be scapegoating our cutting edge technologies of the future, and the jobs that will offer many people their future livelihood, because we broke the system.
NY just passed a $268.5 billion budget for 2027. What was the plan for the energy sector? $1 billion allocated for direct ratepayer relief and an “independent affordability monitor” for utilities that request rate hikes exceeding 3%.
This is the wrong way to address this crisis. You can’t just wish prices to go down. Or force them down. You need to embrace how free markets work and increase supply to meet or exceed demand. This is just as predictable as the science of gravity, and like the Democrats always like to say, follow the science and stop trying to defy gravity.
Robert Hornak is a veteran political consultant who has previously worked for the NYC office of the Republican Assembly Leader and served as Executive Director of the Queens Republican Party. He can be reached at rahornak@gmail.com and @roberthornak on X.
