5 things to know about New York’s new data center moratorium (video)
New York Governor Kathy Hochul signed Executive Order 62, establishing a temporary moratorium on large-scale data center projects to address surging electricity demand and increased water use. The pause, which could last up to one year, aims to develop new environmental standards, ratepayer protections, and community-benefit requirements for these facilities. Projects consuming 50 megawatts or more are affected, with the state halting certain environmental permits while local zoning reviews can continue.
New York Governor Kathy Hochul has enacted Executive Order 62, establishing a temporary moratorium on large-scale data center projects across the state. The order pauses development for up to one year, specifically targeting facilities that consume 50 megawatts or more of electricity, which can rival the power demand of a small city.
The moratorium is a response to a significant surge in proposed data center demand, with nearly 12 gigawatts awaiting interconnection in the New York Independent System Operator’s queue. The state aims to confront the potential strain on the power grid, increased water usage, and the financial burden on utility customers for costly infrastructure upgrades. The order will hold discretionary environmental permit applications from the Department of Environmental Conservation (DEC) in abeyance for covered data centers, while excluding facilities primarily for manufacturing, academic research, or medical care.
During this pause, the Department of Public Service will develop a Generic Environmental Impact Statement (GEIS) to examine the cumulative effects of data center development on electricity demand, grid reliability, water consumption and quality, air quality, noise, lighting, and impacts on disadvantaged communities. The DEC is also directed to review its water withdrawal regulations, and transmission owners will assess their methods for estimating grid upgrades. Additionally, the state is reviewing mechanisms to protect utility customers from speculative project costs, considering a New York Grid Acceleration Fund requiring developer contributions, and exploring legislation to repeal sales tax exemptions for large data centers.
Empire State Development will publish a Community Investment Framework within 60 days, offering local governments a standard baseline for negotiating community benefit agreements, recommending $1 million per megawatt of anticipated demand. This framework will also address prevailing wages, local hiring, environmental impacts, and transparency requirements, aiming to balance the economic benefits of data center investment with local infrastructure needs and community concerns.