Gov. Hochul Creates One Year Moratorium On Data Centers

Governor Kathy Hochul of New York has issued an Executive Order establishing a one-year moratorium on new hyperscale data centers across the state. This initiative, described as the nation's first, temporarily halts the issuance of state environmental permits for data center projects not yet deemed complete. The goal is to develop a comprehensive regulatory framework to safeguard New Yorkers from potential negative impacts, including increased utility bills, depletion of natural resources, and strain on the energy grid.

During this moratorium, the Department of Public Service (DPS) is tasked with creating a Generic Environmental Impact Statement (GEIS) to standardize how new data centers are evaluated for their environmental effects, particularly concerning energy and water usage, and air quality. Concurrently, DPS will continue the "Energize NY" proceeding, which aims to ensure data centers either cover their energy costs or provide their own supply, thus maintaining affordability for residents. The Governor also directed Empire State Development (ESD) to issue a Community Investment Framework (CIF) within 60 days, offering guidance for local entities to negotiate community benefits like infrastructure improvements and financial support from data center developers.

Additionally, Governor Hochul is exploring the creation of a "New York Grid Acceleration Fund" to mandate data center investments in the state's aging grid infrastructure and promote clean energy solutions for their operations. Legislation to repeal sales tax exemptions for large data centers is also being pursued. U.S. Senator Kirsten Gillibrand publicly supported the moratorium, emphasizing the need for guarantees that data center development will not adversely affect communities' energy, water, and air quality.