Law Struggling to Keep Up on Critical Data Center Issues
New York State and two towns on Long Island have enacted moratoriums on data center construction, driven by concerns over their environmental impact, electricity, and water usage. Governor Kathy Hochul's executive order, along with local bans by the Towns of Brookhaven and Islip, has temporarily stopped a proposed $1 billion data center project by developer Wildflower near Yaphank.
The rapid growth of artificial intelligence is outstripping the legal framework to manage the accompanying expansion of hyperscale data centers, which consume vast amounts of electricity, water, and other resources. New York State and Long Island are taking a leading role in regulating this growth.
Governor Kathy Hochul issued an executive order on July 14, imposing a one-year moratorium on hyperscale data center construction (those using 50 megawatts or more of electricity) while the New York State Department of Public Service develops a regulatory framework. This study will examine environmental effects, including water usage, wastewater creation, electric grid strain, cost distribution to ratepayers, aesthetic impacts, and noise pollution. This makes New York the first state to implement such a ban.
Following the state's lead, the Town of Brookhaven adopted an 18-month moratorium on data center construction on July 16, with the goal of developing mitigating laws and regulations. The Town of Islip enacted a similar moratorium on August 11, extending through February 2028, to study comprehensive zoning legislation for data centers. These local moratoriums apply to all data centers, regardless of size.
These actions have effectively halted a proposed $1 billion, 176-megawatt data center project by New York City-based developer Wildflower, planned for 79 acres near Yaphank. While proponents like Nassau County Executive Bruce Blakeman and Long Island Association Acting President and CEO Stacey Sikes argue data centers could bring jobs, tax revenue, and lower energy costs, opponents, including Vision Long Island Director Eric Alexander, emphasize the need to study the unknown impacts and potential changes to community character, reflecting public pushback against the facilities.