New York Halts New Data Center Permits

New York Governor Kathy Hochul has issued Executive Order No. 62, imposing a temporary moratorium on all pending discretionary permits for new data centers across the state. The order aims to allow the Department of Environmental Conservation (DEC) to conduct a comprehensive Generic Environmental Impact Statement (GEIS) to address the substantial energy and water demands fueled by the rapid growth in artificial intelligence, cloud computing, and streaming services. The pause will remain in effect for applications not deemed complete before July 14, 2026, until the Department of Public Service (DPS) delivers a Final GEIS.

The state's power grid operator, NYISO, reports nearly 12 gigawatts of data center requests in its interconnection queue, with over 8 gigawatts added in 2025 alone. A key policy goal of the executive order is to prevent New York's everyday utility ratepayers from bearing the financial burden of the extensive electric system upgrades required for these industrial expansions. The GEIS will rigorously examine impacts on energy grid capacity, clean energy targets, water drawdowns, and localized environmental factors like air quality, noise, and light pollution.

To protect residents from rising utility bills, the executive order directs the DPS to evaluate a New York Grid Acceleration Fund. This mechanism would require data center developers to make upfront capital contributions for grid improvements, support new clean energy supply, and contribute to an insurance pool to shield ratepayers from project-related delays or cancellations. Additionally, the DEC will conduct a Data Center Water Withdrawal Review to assess the cooling demands' effects on natural resources.

During the development halt, Empire State Development (ESD) has 60 days to launch a Community Investment Framework, providing municipalities with tools to negotiate with developers for tangible local benefits.