Hochul signs executive order creating moratorium for data centers
New York Gov. Kathy Hochul signed an executive order enacting a one-year moratorium on large-scale data center development (50MW or more). The order aims to allow the state to create a sustainable regulatory framework, protect ratepayers and the environment, and address strain on the energy grid. It also tasks state agencies with studying data center impacts and developing community investment guidelines.
New York Governor Kathy Hochul signed Executive Order 62 on July 14, establishing a one-year moratorium on the development of new large-scale data centers that consume 50 megawatts of energy or more. The executive order, described as a first-in-the-nation initiative, aims to provide the state with time to develop a comprehensive regulatory framework for data centers. This framework is intended to ensure sustainable development while safeguarding ratepayers, the environment, the energy grid, and local communities across New York.
In a video addressing the executive order, Governor Hochul emphasized the need for AI companies to protect New York's resources and contribute to communities while benefiting from the state's talent and energy. She highlighted the rapid growth of AI technology and its demand for massive energy-guzzling infrastructure, which she stated threatens to outpace the grid's capacity and drive up utility costs for New Yorkers.
Beyond the moratorium, Executive Order 62 directs the Department of Public Service (DPS) to conduct an examination of data center construction impacts and create a Generic Environmental Impact Statement. DPS is also tasked with exploring the creation of a specialized fund, financed by data centers, to modernize the energy grid and mitigate strain. Additionally, the order requests Empire State Development to establish a Community Investment Framework, offering guidance for communities to negotiate contributions from data centers and developers, including investment funds, local infrastructure, and transparency.
State Sen. Kristen Gonzalez and Assembly Member Didi Barrett, who sponsored the Responsible Data Center Development Act (S.10642/A.11560) proposing a similar moratorium and stricter regulations, were consulted on the executive order. While praising the Governor's leadership, both legislators, along with Barrett's chief of staff Gunnar Wordon, indicated they are still advocating for their bill to be signed into law, believing it contains additional critical components not covered by the executive order.