Gov. Kathy Hochul orders one-year data center moratorium in New York

New York Governor Kathy Hochul signed an executive order imposing a one-year moratorium on new hyperscale data center development across the state, effective July 14. This directive temporarily pauses state environmental permits for data centers consuming 50 or more megawatts of power. The goal is to comprehensively evaluate their statewide impact on utility bills, natural resources, the energy grid, and local communities, as stated by the Governor's office. Governor Hochul emphasized the state's commitment to establishing robust standards for data center development to ensure benefits for New Yorkers.

In addition to the ban, Governor Hochul initiated several measures. The New York State Department of Public Service (DPS) will conduct a Generic Environmental Impact Statement for data centers to assess their potential environmental impacts and ensure consistent standards. DPS will also consider creating a New York Grid Acceleration Fund, which would require data centers to invest in the state's aging grid infrastructure. Furthermore, Empire State Development is tasked with issuing a Community Investment Framework within 60 days. The Governor is also pursuing state legislation to repeal certain tax exemptions for large data centers.

This executive order follows recent efforts by the state Legislature, which passed a bill including a one-year data center ban during its last session. While lawmakers originally sought a three-year moratorium, they agreed on a one-year pause to allow for impact studies, establish new electricity rates, energy efficiency goals, and labor standards. Representatives from Governor Hochul's office explained the executive order was enacted to take immediate action while the complexities of the legislative bill are still being navigated, estimating it will take up to a year to establish a comprehensive regulatory framework.