New York becomes first state to ban data centers

New York has become the first U.S. state to enact a moratorium on new "hyperscale data centers" for up to one year, affecting environmental permits while the state studies the environmental impacts and develops a "Community Investment Framework" model. Governor Kathy Hochul stated that this action is necessary to address concerns about rising utility bills, depletion of natural resources, and uncertainty for New Yorkers, citing unprecedented growth in demand for data centers driven by artificial intelligence.

The Governor previously directed the Department of Public Service (DPS) to initiate the Energize NY proceeding, aiming to make data centers pay more for energy or supply their own. Congressman Josh Riley from NY-19 District has also introduced a federal bill with similar goals. As part of the executive order, DPS will develop a Generic Environmental Impact Statement (GEIS) for data centers to ensure consistent standards regarding energy demand, water use, and air quality.

Empire State Development (ESD) is tasked with issuing a Community Investment Framework (CIF) to guide localities in negotiating benefits from data center deals. The Governor is also directing DPS to consider a New York Grid Acceleration Fund to invest in grid infrastructure and pursuing legislation to repeal sales tax exemptions for data centers.

Local actions include the Sullivan County Legislature's support for a state moratorium and the Town of Highland enacting its own one-year moratorium. Specific data center proposals mentioned include TeraWulf's project in Lansing and Eco-Yotta's rezoning effort in Oneonta. A proposed campus in Clinton Township, Pennsylvania, across the border, also faced a declaration of incompleteness and a local moratorium.