New York governor signs nation’s first moratorium on large data centers
New York Governor Kathy Hochul has signed a first-in-the-nation executive order imposing a one-year statewide moratorium on hyperscale data centers, pausing state environmental permits. This action aims to create a strong regulatory framework and ensure communities benefit from developments without residents shouldering utility costs for infrastructure. The moratorium will allow the state to develop consistent standards for energy demand, water use, and air quality.
New York Governor Kathy Hochul has enacted a first-in-the-nation executive order, imposing a one-year statewide moratorium on hyperscale data centers that consume 50 megawatts or more of power. This order immediately pauses the issuance of state environmental permits for these large facilities.
The Governor stated her intent to develop a "nation-leading regulatory framework" during this pause, aiming to ensure that communities benefit from new data center developments and that residents are not burdened with the costs of transmission and infrastructure build-outs through their utility bills. Hochul also announced plans to pursue legislation to repeal sales tax exemptions for large data centers, citing concerns over utility bill increases, natural resource depletion, and community uncertainty.
This executive action follows the recent passage of the Responsible Data Center Development Act by the New York State Legislature, which also included a one-year moratorium and requirements for environmental impact assessments, new rate classes for utility usage, and labor protections. Governor Hochul has not yet indicated whether she will sign or veto this legislative bill, calling it "complicated" and requiring further study. Her policy team indicated that the executive order was a response to widespread community concerns and a growing trend of localities imposing bans across the country.
Under the executive order, the New York Department of Public Service is directed to initiate a proceeding requiring data centers to either pay more for energy or supply their own, and to develop a Generic Environmental Impact Statement (GEIS) to ensure consistent environmental standards for new facilities. The GEIS will assess impacts on energy demand, water use, water quality, and air quality. The moratorium will be lifted once these state standards are finalized. Additionally, the Empire State Development agency is tasked with creating a framework within 60 days to guide local governments on negotiating community benefits, including infrastructure improvements, financial support, and protections for organized labor and wages. Officials emphasized that the goal is not a permanent ban but to establish a robust framework for responsible development.