Subsidy Sheet: New York Subsidizing AI Driven Data Centers, Cutting Energy-Saving Upgrades for Average People
Because of the New York Power Authority’s 1960s mindset and the generally irrational economic development policies pursued by the Empire State Development Authority, New York State’s Recharge NY program is offering hundreds of millions of dollars of below market cost power to an AI-driven explosion of mega-data centers that employ very few people but consume huge amounts of electricity and water for cooling.
Not only is providing below market cost electricity to data centers a waste of a public resource, it is also contrary to New York’s climate goals because it incentivizes overconsumption, while discouraging energy efficiency measures.
While New York lavishes data centers with cheap power, it’s not nearly so generous with regular citizens hoping for a break on electricity costs. As discussed last month, the New York State Energy Research and Development Authority (NYSERDA) has announced it will be scaling back its EmPower+ program that offers energy efficiency upgrades for low- and moderate-income households from $220 million to $80 million over the next two years. And as the Times Union now reports, many ratepayers will only be eligible if they first match the state funds, and even more cuts could be on the horizon, with private contractors who install EmPower+ upgrades told “they could no longer submit applications for funding on behalf of their customers.”
The Times Union reports that Assembly energy committee chair Didi Barrett wrote of the program cuts in an Aug. 7 letter to NYSERDA President and CEO Doreen M. Harris: “This will discourage participation in the program, and severely limit the state’s ability to decarbonize homes not eligible for the full subsidy. I have been outspoken about the need to expand eligibility for our energy-efficiency programs to ensure that those who live at the ‘tipping point’ — just one health care crisis, car repair, or appliance replacement away from financial hardship — are also supported.”Subsidizing wealthy tech companies’ electric bills while cutting aid to everyday New Yorkers is beyond ironic, given that data centers are largely behind the soaring power demand that is driving up rates and pushing Gov. Hochul to press for additional energy sources, including a potential new nuclear power plant and added subsidies for existing ones. Having AI added to everything that didn’t need it may seem relatively harmless, but as long as state policies favor big data over regular residents, it looks like it’s going to come back to bite us on our electrical bills.
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More NY corporate giveaway news from this week:
- Hochul announced $11 million in grants into “clean hydrogen” research, including $2 million to Connecticut-based SWITCH Maritime LLC to develop an experimental hydrogen fuel cell-electric ferry and $2 million to troubled Plug Power for exploring using cryo-compressed hydrogen to power trucks. Investing tax money in Plug Power in particular hasn’t worked out well before, but presumably it sounds sexier to the Governor than helping New Yorkers pay to insulate their homes.
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