First Statewide Moratorium on New Hyperscale Data Centers Launched by Governor Kathy Hochul
New York Governor Kathy Hochul has enacted a first-of-its-kind statewide moratorium on new hyperscale data centers for up to one year. This pause on environmental permits allows the state to develop a comprehensive regulatory framework addressing energy, water, and community impacts. The move is aimed at protecting ratepayers, the environment, and the energy grid across New York.
New York Governor Kathy Hochul has signed an Executive Order establishing the nation's first statewide moratorium on new hyperscale data centers. Effective July 14, the order temporarily pauses State environmental permits for up to one year to allow for the development of a nation-leading regulatory framework. The Governor cited concerns over rising utility bills, depletion of natural resources, and strain on the energy grid due to the rapid growth in data center demand, driven by AI and other computing operations.
During this one-year period, the Department of Public Service (DPS) is directed to develop a Generic Environmental Impact Statement (GEIS) to ensure new data centers adhere to consistent standards, assessing impacts on energy demand, water use and quality, and air quality. The Department of Environmental Conservation (DEC) will not issue new discretionary permits until the GEIS is finalized and the new standards are in place. The DPS will also continue its 'Energize NY' proceeding, requiring data centers to either pay more for energy or supply their own, and is considering creating a New York Grid Acceleration Fund for infrastructure investment.
Additionally, Governor Hochul has directed Empire State Development (ESD) to issue a Community Investment Framework (CIF) within 60 days, guiding local entities in negotiating community benefits such as infrastructure improvements, child care, and direct financial support. The CIF will also prioritize prevailing wage standards, project labor agreements, local hiring, and workforce development. The Governor is also pursuing legislation to repeal sales tax exemptions for large data centers across the state.
State Senator Kristen Gonzalez and Assemblymember Didi Barrett expressed support for the Executive Order, acknowledging the public's concerns about data centers' impacts. Laura Shindell, New York State Director for Food & Water Watch, lauded the moratorium as a significant step forward resulting from public pressure, though she emphasized the need for further action, pointing to specific proposals in Orangeburg, Rockland County, that may not be fully covered by the current moratorium's scope.