Hochul launches statewide one year moratorium on data centers
New York Governor Kathy Hochul signed an Executive Order enacting a statewide one-year moratorium on new hyperscale data centers. This pause on environmental permits aims to develop a nation-leading regulatory framework addressing concerns about energy consumption, environmental impact, and community benefits. During this period, the state will create a Generic Environmental Impact Statement and a Community Investment Framework.
Governor Kathy Hochul signed an Executive Order on Tuesday, July 14, implementing the nation's first statewide one-year moratorium on new hyperscale data centers in New York. The order temporarily halts State environmental permits for these facilities to allow for the development of a robust regulatory framework. Governor Hochul stated that this action is necessary to address potential increases in utility bills, depletion of natural resources, and strain on the energy grid, ensuring that New Yorkers benefit from development spurred by the unprecedented demand from artificial intelligence and other computing operations.
As part of this initiative, the Governor has directed the Department of Public Service (DPS) to develop a Generic Environmental Impact Statement (GEIS) for data centers, which will assess their environmental impacts, including energy and water use. During the GEIS development, the Department of Environmental Conservation (DEC) will not issue new discretionary permits. Additionally, Empire State Development (ESD) is tasked with issuing a Community Investment Framework (CIF) to guide local entities in negotiating community benefits from large-scale data center projects, including infrastructure improvements and direct financial support. The CIF also prioritizes organized labor, prevailing wage standards, and local hiring.
The Governor further directed DPS to explore the creation of a New York Grid Acceleration Fund, which would require data centers to invest in the state's aging grid infrastructure and fund new clean energy generation dedicated to their operations. This fund would also aim to protect against speculative large loads that could increase costs for other ratepayers. Lastly, Governor Hochul is pursuing legislation to repeal existing sales tax exemptions for large data centers across the state.