Hochul orders temporary pause on large data centers as New York rewrites rules
Governor Kathy Hochul issued an executive order placing a temporary halt on state permitting for large data centers (50MW+) in New York. This pause allows state regulators to develop new standards addressing environmental impacts, grid connections, and community benefits related to data center construction and operation. The order aims to prevent everyday utility customers from bearing the cost of required electric system improvements for these large new loads.
Governor Kathy Hochul signed an executive order Tuesday initiating a temporary, statewide pause on discretionary state permitting for many large data centers in New York. The order targets facilities capable of consuming at least 50 megawatts of electricity and aims to allow state regulators to develop comprehensive new standards. This includes examining the cumulative effects of data center construction and operation on electric bills, water supplies, the power grid, and host communities.
The executive order directs state agencies, including the Department of Environmental Conservation (DEC) and the Department of Public Service, to conduct a Generic Environmental Impact Statement. This review will cover energy demand, water consumption and quality, air pollution, noise, and potential impacts on disadvantaged communities. The DEC is also tasked with reviewing water withdrawal regulations for large users, with a report due in 12 months, as the existing regulatory framework is deemed unprepared for the scale of water use by large data centers.
A key focus of the order is to ensure that everyday utility customers do not bear the cost of electric system improvements necessitated by large new loads. Regulators will consider a New York Grid Acceleration Fund, potentially requiring data center developers to make upfront capital contributions for grid upgrades, new clean-energy resources, and energy affordability programs. Additionally, the Department of Public Service will establish a Data Center Interconnection Working Group within 60 days to address grid connection and cost allocation, with a report to the Public Service Commission due within 90 days.
Empire State Development is also mandated to create a Community Investment Framework within 60 days. This framework will guide local governments and industrial development agencies in negotiating direct financial and infrastructure commitments from data center operators, potentially covering community funds, local infrastructure investments, and labor standards. While Earthjustice welcomed the order, it emphasized the need for binding regulations to ensure developers cover their full energy and water demands and urged Governor Hochul to sign the Responsible Data Center Development Act for long-term protections.