NY hits pause on hyperscale data centers with immediate executive order

New York Gov. Kathy Hochul signed an executive order on July 14, immediately imposing a one-year moratorium on new hyperscale data center development across the state. The order temporarily halts state environmental permits for data centers requiring 50 or more megawatts of power, allowing the state to study their impact on New York ratepayers, the environment, the energy grid, and local communities.

Governor Hochul stated that the action is necessary to prevent data center development from increasing utility bills, depleting natural resources, and creating uncertainty for New Yorkers. She emphasized the state's commitment to creating strong standards for data center development. In parallel, the State Department of Public Service (DPS) will develop a Generic Environmental Impact Statement for data centers and explore the creation of a New York Grid Acceleration Fund, requiring data centers to invest in the state's aging infrastructure. Empire State Development is also tasked with issuing a Community Investment Framework.

This executive order follows the state Legislature's passage of similar legislation, which also included a one-year ban on new data centers, in their last official session. While lawmakers initially sought a three-year moratorium, they settled on a one-year pause to allow for impact studies, establish new electricity rates for large data centers, set energy efficiency goals, and define labor standards. Representatives from the governor's office explained that the executive order provides immediate action while the complexities of the legislative bill are resolved, with the measures expected to last up to a year until a new regulatory framework is established. Hochul is also seeking state legislation to repeal certain tax exemptions for large data centers.