Hochul signs executive order for moratorium on hyperscale data centers
New York Governor Kathy Hochul has signed an Executive Order enacting a one-year moratorium on new hyperscale data center development across the state. This pause allows for the creation of a new regulatory framework to address concerns about energy consumption, environmental impact, and community benefits. The state aims to develop strong standards for future data center projects.
Governor Kathy Hochul of New York has signed an Executive Order implementing the nation's first moratorium on new hyperscale data center development. The temporary pause, lasting up to one year, aims to establish a robust regulatory framework that safeguards ratepayers, the environment, the energy grid, and local communities across the state. Governor Hochul emphasized the state's responsibility to act as data center growth threatens utility bills, natural resources, and stability for New Yorkers.
During this moratorium, the Department of Environmental Conservation (DEC) will not issue new discretionary environmental permits for data centers. The Department of Public Service (DPS) has been directed to develop a Generic Environmental Impact Statement (GEIS) to assess potential impacts, including energy demand, water use, and air quality. Concurrently, DPS is continuing the Energize NY proceeding, which seeks to make data centers pay more for energy or supply their own, and is also considering a New York Grid Acceleration Fund to require data center investment in grid infrastructure.
Additionally, Empire State Development (ESD) will issue a Community Investment Framework (CIF) within 60 days. This framework will guide localities in negotiating community benefits from large-scale data center projects, such as infrastructure improvements, childcare investments, and direct financial support. It will also prioritize prevailing wage standards and project labor agreements. Governor Hochul is also pursuing legislation to repeal sales tax exemptions for large data centers.
State Senator Kristen Gonzalez and Assemblymember Didi Barrett expressed strong support for the Executive Order, highlighting concerns from constituents about environmental impact, energy grid strain, and utility cost increases. They view the moratorium as a crucial first step to ensure responsible development that benefits all New Yorkers.