New York becomes the first state to enact a data center moratorium
New York Governor Kathy Hochul has enacted the nation's first statewide moratorium on new hyperscale data centers over 50 megawatts for up to a year. This executive action aims to provide time for the state to develop regulations addressing concerns about rising energy prices and environmental impacts. A separate, potentially more restrictive bill passed by the state legislature is still awaiting the governor's signature.
New York Governor Kathy Hochul has signed an executive order establishing the first statewide moratorium on new hyperscale data centers (over 50 megawatts) in New York, effective immediately for up to one year. The move is intended to allow the state's Department of Public Service (DPS) to develop regulations addressing concerns about rising energy prices and environmental impacts, including water usage and air quality. The governor's order sets a higher power threshold for impacted projects than a bill passed by the state legislature, which awaits her signature.
The executive action gives the state time to plan for data center growth, as Governor Hochul stated it's her responsibility to act when development threatens utility bills and natural resources. The DPS is tasked with creating standards for environmental assessments and a framework for data centers to invest in energy infrastructure. Additionally, the state's development arm will help local communities negotiate benefits from incoming data center projects.
New York State Senator Kristen Gonzalez, a proponent of the legislative moratorium, commended Governor Hochul's executive order, emphasizing the need for planned development that doesn't compromise residents' well-being. The action follows a national trend of communities grappling with the impact of data center expansion driven by AI demand, with Maine previously attempting a similar moratorium. Governor Hochul also plans to seek legislative changes to roll back sales tax exemptions for large data centers.