Business groups say Hochul's pause on data centers could hurt New York State
New York Gov. Kathy Hochul has signed an executive order implementing a one-year moratorium on new hyperscale data centers (over 50MW) to allow state agencies to develop a regulatory framework addressing their significant energy and water demands. The decision drew criticism from business and construction groups who warned of job losses and investment flight, while environmental advocates largely supported the move and called for further legislative action. The order aims to prevent adverse impacts such as increased utility bills, water depletion, and noise pollution.
New York Gov. Kathy Hochul signed an executive order on Tuesday, implementing a one-year pause on new hyperscale data centers exceeding 50 megawatts that have not yet received construction permits. The governor stated the order is crucial to provide state regulatory agencies with time to develop a comprehensive framework to manage the substantial water and energy requirements of these facilities, as well as address potential issues like noise pollution and increased utility bills. The order, which applies statewide, is the first of its kind in the nation.
Business and technology groups, including the Long Island Association and the United Association of Union Plumbers and Pipefitters, sharply criticized the moratorium. They argued that the pause sends a negative signal to technology companies, potentially leading to lost investment and jobs as firms choose to build data centers in other states. Nassau County Executive Bruce Blakeman, a Republican, echoed these concerns, blaming the governor for existing high utility costs and a lack of economic development.
Conversely, environmental organizations, such as Environmental Advocates NY and Food & Water Watch, lauded the executive order as a positive initial step. They emphasized the necessity of understanding the full environmental impact of the data center industry on water resources, the energy grid, and utility expenses. State legislators, including Sen. Kristen Gonzalez (D-Queens) and Assemb. Charles Lavine (D-Glen Cove), also expressed support, highlighting the importance of balancing technological advancement with environmental protection and residents' economic well-being.
The executive order mandates the development of a standard environmental assessment to evaluate energy demands, water usage, noise levels, and impacts on disadvantaged communities. It also stipulates that data centers must either generate their own energy or pay a premium to connect to the state's power grid. This action follows a failed legislative bill that also sought a one-year pause, with Hochul's office stating the executive order allowed for faster action to address public concerns.