New York enacts data center moratorium; Texas considers development restrictions
New York Governor Kathy Hochul has enacted a one-year moratorium on data center construction exceeding 50 megawatts, citing environmental and resource concerns. This executive order has put a major $20 billion project in the Town of Alabama, New York, in jeopardy, where local leaders and opponents are divided. Meanwhile, Texas lawmakers and Governor Greg Abbott are also proposing similar measures, including a statewide pause and limiting tax incentives.
The demand for data centers is driving up prices, and massive projects continue to be highly divisive, with proponents touting benefits and opponents raising concerns about their future impact. New York has become the first state to ban data center construction, with Democratic Governor Kathy Hochul issuing an executive order placing a one-year hold on environmental permits for any centers exceeding 50 megawatts.
This statewide moratorium comes amidst growing concerns over data facilities driving up power costs, straining water supplies, and burdening local communities. Governor Hochul also aims to pursue legislation to repeal sales tax exemptions for data centers. The executive order has jeopardized a proposed $20 billion data center project in the Town of Alabama, New York, which local leaders say could generate over $218 million in local revenue over 20 years. Opponents of this project hope the moratorium will lead to a deeper review, emphasizing their commitment to continued opposition.
Before the moratorium was issued, the Alabama project was still awaiting final environmental and site plan approval from the local planning board and is currently facing a lawsuit regarding a zoning agreement between the town and the county. Meanwhile, lawmakers in other states, including Central Texas, are also calling for moratoriums or additional regulations, citing concerns around water use, electricity demand, and community impact. Texas Governor Greg Abbott has called for limiting new data center development in rural areas and eliminating industry tax incentives, while the Texas Data Center Industry argues such measures could have significant economic consequences.