NY state pauses new large data center projects in US first
New York became the first US state to enact a statewide moratorium on new large-scale data center projects, with Governor Kathy Hochul signing an executive order to pause permits for up to one year. This pause aims to allow the state to develop regulations for the rapidly expanding sector, addressing concerns about high electricity and water consumption and potential impacts on utility bills and natural resources. The executive order applies to facilities with capacities of at least 50 megawatts and also includes plans to pursue legislation repealing sales tax exemptions for massive data centers.
New York Governor Kathy Hochul signed an executive order, immediately enacting a statewide moratorium on new large-scale data center projects for up to one year. This makes New York the first US state to implement such a pause, applying to facilities requiring at least 50 megawatts of electricity.
The governor stated that the moratorium is necessary to give the state time to develop comprehensive regulations for the data center sector, which is rapidly expanding due to demand for artificial intelligence. Concerns driving this action include data centers' high electricity consumption, potential strain on local grids, inflated energy bills, heavy water usage, noise generation, and the relatively small number of jobs created. Hochul emphasized that New York will lead in creating strong standards to ensure benefits for New Yorkers.
Additionally, Governor Hochul announced plans to pursue legislation that would repeal sales tax exemptions for massive data centers within the state. While numerous US cities and counties have enacted local restrictions, New York's move marks the first statewide pause. The state legislature had passed a separate moratorium bill in June with a lower threshold, but Hochul has not signed it, citing the need for further work. Tech companies and industry supporters argue that such restrictions hinder local job growth and global competitiveness in AI development. The article also briefly mentions a similar moratorium in Maine that was vetoed by Governor Janet Mills.