New York becomes the first state to enact a data center moratorium
New York Governor Kathy Hochul has signed the nation's first statewide moratorium on new environmental permits for data centers exceeding 50 megawatts. This one-year pause aims to give the state time to develop regulations protecting residents from rising energy prices and environmental impacts. A potentially more restrictive bill passed by the state legislature is still awaiting the governor's signature.
New York Governor Kathy Hochul has enacted the nation's first statewide moratorium on new hyperscale data centers, signing an executive order that blocks environmental permits for facilities over 50 megawatts for up to a year. The move is intended to allow the state time to develop regulations that protect residents from rising energy prices and potential environmental impacts, including concerns over water use and air quality.
While the executive action establishes a 50-megawatt threshold, a bill previously passed by the state legislature proposed a stricter 20-megawatt limit for new developments and is still awaiting Governor Hochul's signature. The Governor's office stated that the higher threshold in the executive order is meant to avoid disrupting smaller data centers used by institutions like hospitals.
Governor Hochul tasked the Department of Public Service (DPS) with creating standards to assess the environmental impact of data center construction and operation. She also asked DPS to explore ways for data centers to invest in the state's energy infrastructure and charged the state's development arm with creating a framework for local communities to negotiate benefits with data center developers. Furthermore, Hochul announced plans to push the legislature next year to roll back sales tax exemptions for large data centers in the state, addressing concerns about government subsidies for these developments.