First Statewide Moratorium on Data Centers
Governor Kathy Hochul has signed an Executive Order to enact a statewide one-year moratorium on new hyperscale data centers in New York. This pause aims to establish a comprehensive regulatory framework to protect ratepayers, the environment, and the energy grid. During this period, the state will develop a Generic Environmental Impact Statement (GEIS) for data centers and a Community Investment Framework to guide local negotiations for community benefits.
Governor Kathy Hochul has implemented a groundbreaking statewide moratorium on new hyperscale data centers in New York, initiating a one-year pause on State environmental permits. This Executive Order aims to develop a robust regulatory framework that safeguards ratepayers, the environment, and the state's energy infrastructure amid a surge in data center development driven by AI and other computing operations.
During the moratorium, the Department of Public Service (DPS) will undertake an Energize NY proceeding, requiring data centers to either pay more for energy or supply their own, and will develop a Generic Environmental Impact Statement (GEIS) to standardize environmental impact assessments for new data centers. The Department of Environmental Conservation (DEC) will not issue new discretionary permits until the GEIS is finalized. Additionally, Empire State Development (ESD) is tasked with issuing a Community Investment Framework (CIF) within 60 days, offering guidance for localities to negotiate community benefits, including infrastructure improvements and financial support, with data center developers.
Governor Hochul is also directing DPS to explore creating a New York Grid Acceleration Fund, which would require data centers to invest in the state's aging grid infrastructure and fund new clean electric generation dedicated to their operations. Furthermore, the Governor plans to pursue legislation to repeal sales tax exemptions for large data centers across the state. These measures are part of New York's broader strategy to manage technological growth responsibly, including initiatives like Empire AI and the FutureWorks Commission.