Nearly 500 small business owners across New York have signed a letter to Governor Kathy Hochul and the state legislature calling for a three-year moratorium on hyperscale data center construction, citing rising electricity costs, water resource strain, and land use impacts as direct threats to their operations. The push centers on Senate Bill S9144, introduced by state Senators Liz Krueger and Anna Kelles on February 6, 2026, which would halt permits for new data center construction, siting, and commencement of operations for three years while the state assesses climate and grid impacts. The coalition’s effort gained public momentum last week when more than 100 state legislators, activists, and residents rallied at the Capitol in Albany in support of the bill.
What Senate Bill S9144 Would Cover
S9144 would impose a three-year pause on new data center permits in New York, covering construction, siting, and the commencement of operations for facilities above 20 megawatts – a threshold Food & Water Watch has described as the basis for what it calls the strongest data center moratorium bill in the country. During the moratorium period, the bill would require the state to review whether existing subsidies, grid interconnection rules, and fossil fuel dependencies align with New York’s Climate Leadership and Community Protection Act, which mandates economy-wide net-zero emissions by 2050. The review is designed to produce enforceable regulations before new large-scale data center construction resumes.
New York is at least the sixth U.S. state where lawmakers have introduced legislation to pause data center construction, reflecting what the Center for Earth Ethics has characterized as a growing and surprisingly bipartisan backlash against AI infrastructure buildouts in statehouses grappling with energy and water strain. Nationally, more than 230 organizations – including Greenpeace, Friends of the Earth, Americans for Financial Reform, and Physicians for Social Responsibility – sent a letter to Congress in December 2025 urging a federal moratorium on new data centers until adequate regulations can be enacted.
Why Small Businesses Are Backing the Moratorium
The letter from the small business coalition argues that data center expansion threatens the economic viability of businesses in tourism and agricultural corridors, where clean water, stable energy costs, and environmental quality are operational inputs, not amenities. Small businesses account for 98% of all businesses across New York State, according to the letter, which frames the moratorium as a protective measure for the state’s existing economic base rather than an obstacle to growth.
In the Finger Lakes region, the concerns are already grounded in an operating facility. Vinny Aliperti, owner of Billsboro Winery, cited Greenidge Generation – an existing facility in the region that expanded from power generation into cryptomining – as a proximate example of the harm at stake.
“We already experience the harms of Greenidge Generation in our community – from cryptomining-driven pollution and noise to massive energy use – and now the company wants to dramatically expand operations through an AI data center that could triple its energy consumption,” Aliperti said.
Tina Hazlitt, owner of Sawmill Creek Vineyards, whose family has operated in the Finger Lakes for six generations, called for transparency on energy demand and water use before any further expansion is approved. Yvonne Taylor, Vice President of Seneca Lake Guardian and President of the National Coalition Against Cryptomining, framed the issue as a question of who bears the cost of AI infrastructure: “New Yorkers should not be forced to sacrifice their businesses that have sustained this state for generations so out-of-state corporations can profit from energy-hungry AI data centers.”
The coalition’s letter also flags the job creation claims that have accompanied data center proposals in other states, noting that large developments have historically delivered a short-term surge in construction employment followed by very few permanent positions, while also receiving substantial tax abatements that shift costs onto existing businesses and residents. KC Ellis, President of Grunge Works Studios, LLC, added that the economic case for data centers rests on uncertain ground: “Any economic benefits for the state are far from certain given the likelihood that many AI companies could see a collapse in the near future, leaving the taxpayers of New York with a major cleanup bill.” Small business owners across sectors are increasingly engaging in this type of direct policy advocacy, as seen in recent federal lobbying efforts by Main Street coalitions on Capitol Hill.
What the Moratorium Push Means for Small Businesses in Practice
In practice, the concern runs through two channels: electricity rates and resource competition. Data centers at hyperscale – those exceeding 20 megawatts – draw continuous, heavy loads from regional grids, and as more facilities come online, grid operators face pressure to procure additional generation capacity, often from fossil fuel sources, which increases wholesale power costs that pass through to commercial ratepayers. Adrianne Picciano, owner of The Dirt Diva, put it plainly: “Resources such as water and energy are being stretched to the max already. These data centers will break our energy system and threaten our dwindling fresh water supply that businesses like mine across the state rely on.” Energy infrastructure disruptions have repeatedly demonstrated their capacity to push operating costs onto small businesses with little notice or recourse.
J. Theodore Fink, AICP, President of GREENPLAN Inc., a planning firm, argued that a state-level moratorium is the appropriate legal instrument precisely because it prevents a fragmented local response. Citing the New York Department of State’s own publication on land use moratoria, Fink noted that the tool is designed to “prevent rush to development” and “address a new kind of use” – conditions he said apply directly to data center proliferation. Without state-level action, he warned, individual municipalities would each adopt their own moratoria, creating a patchwork of regulations that would be inconsistent and difficult to enforce.
Where the Moratorium Push Stands and What Comes Next
S9144 is currently advancing through the New York State Senate, with its Assembly counterpart pending. Lawmakers will need to decide before the legislative session closes whether to move a full three-year pause or a modified version tied to specific emissions or energy thresholds. Industry critics have argued that a multi-year halt risks driving data center investment to more permissive states or countries and could undercut U.S. competitiveness in AI development – a counterargument that will likely shape floor debate and any amendment process.
Whether S9144 advances to a floor vote will depend on whether Governor Hochul signals support and on how legislative leadership weighs organized small-business opposition against the economic development arguments from the tech sector and its allies.