New York first US state to impose data centre moratorium
New York has become the first US state to impose a one-year moratorium on the construction of large new data centers, citing concerns about rising power costs, strained water supplies, and community impact. Governor Kathy Hochul announced the ban, which applies to data centers using 50 megawatts or more of power, and directed state officials to develop consistent environmental standards during this period. The state will also pursue legislation to repeal sales tax exemptions for large data centers.
New York has become the first U.S. state to enact a one-year moratorium on the construction of large new data centers, a move announced by Governor Kathy Hochul on Tuesday. The ban targets facilities that consume 50 megawatts or more of power, addressing growing concerns that the data centers fueling the artificial intelligence boom are contributing to higher utility bills, straining water resources, and burdening local communities.
During the moratorium, the state's Department of Environmental Conservation will halt the issuance of discretionary permits for new data centers. Governor Hochul has directed state officials to develop a Generic Environmental Impact Statement (GEIS) to establish consistent environmental standards for future data center development and to study their potential environmental impacts. The construction ban will be lifted once these new standards are finalized. Hochul also indicated plans to pursue legislation aimed at repealing sales tax exemptions for large data centers.
This action positions New York at the forefront of a national debate, as other states consider measures to regulate the industry's impact on electricity grids and the environment. While the New York legislature previously passed a bill to impose data center guardrails, it has not yet been signed by the Governor. A recent Reuters/Ipsos poll indicates that public approval for the rapid pace of data center construction is low, with many Americans opposing such facilities in their communities. Data from the independent grid operator shows over 12 gigawatts of large energy-using loads, including data centers, are currently in line to connect to the New York state grid, while the state already faces high residential electricity prices.