New York enacts one-year data center moratorium

Governor Kathy Hochul of New York signed an executive order on July 14, enacting a one-year moratorium on new hyperscale data center development throughout the state. This "first-in-nation" pause specifically targets data centers requiring 50 or more megawatts of power, temporarily halting state environmental permits. The objective is to assess the comprehensive impact on New York ratepayers, the environment, the energy grid, and local communities.

Governor Hochul emphasized that this measure is crucial to prevent data center development from escalating utility bills, depleting natural resources, and causing uncertainty for residents. She stated New York aims to establish robust standards for data center development, ensuring mutual success for companies and New Yorkers. Alongside the moratorium, the state Department of Public Service (DPS) will draft a Generic Environmental Impact Statement to standardize assessments and study environmental effects, while also considering a "New York Grid Acceleration Fund" to mandate data center investment in grid infrastructure.

Additionally, Empire State Development is tasked with issuing a Community Investment Framework within 60 days, and the governor is advocating for state legislation to repeal certain tax exemptions for large data centers. This executive action follows recent legislative efforts to pass a one-year data center ban, which the governor's office described as "complicated," necessitating immediate action through the executive order while the bill's nuances are resolved. The order takes immediate effect and is expected to last for up to a year until a permanent regulatory framework is established.