Governor Hochul Signs Executive Order Imposing One-Year Moratorium On Large Data Centers
New York Governor Kathy Hochul signed an executive order imposing a one-year statewide moratorium on large data centers consuming over 50 megawatts, citing concerns over energy and water use and environmental impacts. The order aims to develop consistent regulatory and community guidelines. Separately, the town of Orangetown is considering its own moratorium, and a DataBank expansion project in Orangeburg faces a deeper environmental review following public opposition.
New York Governor Kathy Hochul has enacted a one-year, statewide moratorium on the construction of new large-scale data centers, specifically targeting facilities consuming over 50 megawatts of energy. Signed via Executive Order, the moratorium aims to address significant concerns regarding the data center industry's impact on energy and water resources, environmental quality (including air, noise, and light), and overall quality of life across the state. Governor Hochul emphasized the state's responsibility to lead in establishing strong standards to ensure data center development benefits New Yorkers, not just companies.
The Executive Order temporarily halts the issuance of discretionary state environmental and construction permits for new projects, while exempting existing facilities or those for manufacturing, research, education, or medical care. It directs the Department of Public Service (DPS) to develop standardized regulations and rate structures to protect utility customers from rising energy costs and strain on the power grid. The DPS will also explore rules requiring new data centers to build their own clean power systems or pay a premium. Additionally, Empire State Development (ESD) is tasked with creating a "community investment framework" to help local municipalities secure benefits like union labor requirements and infrastructure investments from developers. The DEC is charged with assessing new regulations for large water users, including data centers. Governor Hochul is also in discussions with lawmakers to eliminate sales tax and other subsidies for data centers.
Separately, the New York Legislature had approved a one-year data center construction pause, which is expected to be vetoed by the governor given her executive action. The legislative proposal targeted data centers with a peak energy demand of 20 Megawatts or more, a lower threshold than the governor's 50 MW limit.
Locally, the town of Orangetown in Rockland County is also considering its own data center moratorium. The Orangetown Planning Board recently subjected a proposed 77,862-square-foot expansion by DataBank for its existing data center in Orangeburg to a "Positive SEQRA Declaration," requiring a deeper environmental review. DataBank's attorney, Lino Sciarretta, stated that their 15 MW Phase 2 project is below both the state's 50 MW threshold and the proposed legislative 20 MW threshold, thus not directly impacted by the statewide moratorium. However, the project faces public outcry, which influenced the Planning Board's decision for further environmental scrutiny. A Siena Poll indicated that 46 percent of New Yorkers favored a one-year moratorium on large data centers.