Hochul to sign less restrictive data center delay

New York Governor Kathy Hochul has signed an executive order enacting a one-year statewide moratorium on the construction of large data centers. The order, which went into effect on Tuesday, is designed to give state agencies time to establish new regulations requiring data centers to contribute to utility costs, protect the environment, and provide benefits to their host communities.

This executive action by Governor Hochul is notably less restrictive than a data center moratorium bill, A.11560/S.10642, that was passed by state lawmakers earlier in the legislative session. Hochul opted not to sign that legislation, which had proposed stricter measures such as prevailing wage standards, higher renewable energy requirements, mandatory public hearings, and detailed environmental impact reports from the Department of Environmental Conservation (DEC). The legislative proposal also sought to amend the Public Service Law to create independent service classifications and adjustment mechanisms for large energy and water users, and to authorize NYSERDA and other bodies to set efficiency goals.

Under Hochul's executive order, the state DEC is directed not to issue new data center permits until a generic environmental impact statement is developed to assess projects' impacts on energy demand, water use, water quality, and air quality. Additionally, the Public Service Commission will consider a "grid acceleration fund" to require data centers to invest in state electric grid infrastructure, potentially through building their own power generators. Empire State Development is also tasked with creating a framework to assist municipalities in negotiating benefit agreements with data center developers.