N.Y. enacts nation’s first statewide moratorium on building new data centers
New York has enacted the nation's first statewide moratorium on new hyperscale data center construction, pausing approvals for environmental permits for one year. Governor Kathy Hochul issued an executive order to allow time for lawmakers to develop a framework addressing concerns about energy and water resources, and potential utility cost increases. The move has drawn criticism from labor unions and construction groups who argue it will harm job growth.
Governor Kathy Hochul has issued an executive order placing a one-year statewide moratorium on new hyperscale data center construction in New York. The order halts the approval of environmental permits for new facilities, allowing state lawmakers to create a regulatory framework to protect residents and the environment from the demands of these energy and water-intensive operations.
The moratorium addresses growing concerns over the strain data centers place on the energy grid, water supplies, and the potential for increased utility costs, especially with the surge in AI-driven development. Existing data center projects that were previously approved are not affected by the ban. The Department of Public Service is tasked with developing guidelines and standards during this period, after which the moratorium will be lifted. Governor Hochul emphasized the state's welcome to AI investments but stressed the need for safeguards to protect New Yorkers' resources.
The decision has garnered support from figures like state Sen. Kristen Gonzalez and Sen. Kirsten Gillibrand, who highlighted the need for trust and clear rules to ensure community benefits and resource protection. However, the moratorium has met strong opposition from industry groups. Mark McManus, general president of the United Association of Union Plumbers and Pipefitters, warned it would "kill good-paying union jobs." Similarly, Mike Elmendorf, president and CEO of the Associated General Contractors of New York State, called it a "de facto ban" that risks driving investments and jobs to other states actively competing for data center development.