New York Governor Enacts One-Year Moratorium on Large Data Center Construction
New York Governor Kathy Hochul has signed an executive order imposing a one-year ban on new large-scale data center construction, citing concerns over power grid stability and rising utility costs. This decision reflects growing public and environmental opposition to data centers' high electricity and water consumption, with other states also considering similar restrictions.
New York Governor Kathy Hochul enacted an executive order on Tuesday, July 15, 2026, imposing a one-year moratorium on the construction of new large-scale data centers with a power capacity of 50 megawatts or more. Governor Hochul stated that the ban addresses the significant electricity consumption of hyperscale AI data centers, which she believes threaten the state's power grid stability and increase residential utility costs, costs she committed to not pass on to New Yorkers.
This decision aligns with increasing concerns from New York residents and environmental groups regarding data centers' substantial power and freshwater demands. The Empire Center, a US think tank, reported a nearly 68% cumulative surge in New York's residential electricity bills since 2019. Opposition to data center development is widespread, with a May Gallup poll indicating that 71% of Americans oppose such projects in their communities, a higher percentage than those opposing nuclear power plants.
The issue extends beyond New York, with Florida Governor Ron DeSantis voicing similar concerns about demand outstripping capacity and driving up costs. Industry leaders, however, caution that construction moratoriums could hinder America's competitiveness in the global AI sector.
A Financial Times report for Q1 2026 indicated that community opposition impacted at least 75 data center projects in the US, representing an estimated $130 billion in capital investment. Beyond New York, over a dozen other US states are exploring data center restrictions or bans, while Virginia has already implemented new taxes and fees on data center energy consumption.