Hochul orders 1-year ban on large data center construction

New York Governor Kathy Hochul has issued an executive order placing a one-year moratorium on the construction of large data centers across the state. The ban specifically targets facilities exceeding 50 megawatts that have not yet secured construction permits. The governor stated that the pause is necessary to allow state regulators to conduct environmental assessments, establish consistent standards for data center operations, and develop rules for how these facilities can provide their own energy.

The decision comes amidst increasing public pushback against hyperscale data centers, with residents and communities raising concerns about potential environmental and financial impacts, including rising utility bills and the depletion of natural resources. Governor Hochul emphasized her responsibility to address these issues, noting that data center development threatens New Yorkers.

This executive order follows a bill passed by state lawmakers last month, which also sought a one-year delay on new large data center construction and would have required developers to source at least one-third of their power from renewables. While the executive order doesn't prevent Hochul from signing the legislation, her office indicated the order was issued to more quickly address residents' concerns. Additionally, the governor has directed the Department of Public Service to explore creating a fund for data center developers to invest in the state's power grid and mitigate increased demand, and she plans to pursue legislation next year to remove sales tax exemptions for data centers. Empire State Development is also working on a framework for community benefit deals between local governments and data center developers.