New York Governor Kathy Hochul Signs Nation’s First Moratorium on Data Centers
New York Governor Kathy Hochul has signed an Executive Order establishing a one-year moratorium on new hyperscale data centers across the state. This action aims to develop a regulatory framework addressing concerns over utility bills, natural resource depletion, and energy grid strain caused by data center development. The state plans to create an environmental impact statement and community investment guidelines during this pause.
Governor Kathy Hochul signed an Executive Order on July 14, implementing a one-year moratorium on new hyperscale data centers in New York. This makes New York the first state to issue such a statewide pause, aimed at developing a comprehensive regulatory framework to protect ratepayers, the environment, the energy grid, and communities from the impacts of data center growth. The Governor cited concerns over increased utility bills, depletion of natural resources, and general uncertainty for New Yorkers as reasons for the action.
As part of this initiative, Governor Hochul has directed the Department of Public Service (DPS) to continue its "Energize NY" proceeding, which seeks to make data centers either pay more for energy or supply their own. DPS is also tasked with developing a generic environmental impact statement (GEIS) for data centers, which will assess their potential effects on energy demand, water use, and air quality. During the GEIS development, the Department of Environmental Conservation (DEC) will not issue certain discretionary permits.
Additionally, Empire State Development (ESD) is instructed to create a community investment framework (CIF) to guide local entities in negotiating benefits like infrastructure improvements and financial support from large-scale data center projects. This framework also emphasizes organized labor, prevailing wage standards, and local hiring. Governor Hochul is also exploring the creation of a New York Grid Acceleration Fund, requiring data centers to invest in grid infrastructure and potentially fund new clean energy generation, and is pursuing legislation to repeal sales tax exemptions for large data centers.
This statewide action follows local opposition, including a petition presented to the Lansing town board on June 17 by "No Data Center FLX" against TeraWulf's planned data center at the former Cayuga Power Plant. Kenneth Wolkin, president of FLX Strong, expressed satisfaction with the Governor's response but noted significant differences between the Executive Order and a legislative moratorium bill, stating the group would continue to advocate for the latter and anticipated the Executive Order would cause delays for TeraWulf's project.