New York becomes first U.S. state to impose moratorium on large data centers
Governor Kathy Hochul signed an executive order Tuesday blocking environmental permits for data centers using 50 megawatts or more, citing threats to utility bills, water supplies and grid stability.
The executive order
New York Governor Kathy Hochul signed the nation's first statewide data center moratorium on Tuesday, immediately halting the issuance of environmental permits for large facilities for up to one year. The order applies to data centers drawing 50 megawatts or more of power, a threshold designed to exempt smaller facilities used by hospitals and universities. During the pause, the state's Department of Environmental Conservation will not approve any discretionary permits not already deemed complete.
As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it's my responsibility to take action and lead.
Scope and immediate impact
The moratorium targets so-called hyperscale data centers, and the 50-megawatt floor is higher than the 20-megawatt cutoff included in a bill the state legislature passed last month. Hochul's office could not immediately say how many proposals would be affected, but a staffer acknowledged that a $19.4 billion facility sparking community concern in Genesee County would likely be impacted if it still needs Department of Environmental Conservation permits. The order explicitly protects back-office data needs of financial services, hospitals and universities.
What happens next
Within 60 days, the state will issue guidance to help local governments negotiate community benefits such as infrastructure improvements, child care investments or direct financial support from developers. The Department of Public Service is also directed to consider creating a New York Grid Acceleration Fund that would require data center operators to invest in the state's aging electricity infrastructure. Local hiring, apprenticeships and prevailing wage standards are prioritized in the order, and Hochul said she will pursue legislation to repeal sales tax exemptions for large data centers.
- New York legislature passes Responsible Data Center Development Act with 20 MW threshold; bill awaits governor's signature.
- Governor Hochul signs executive order pausing permits for data centers over 50 MW for up to one year.
- State to issue guidance for local governments to negotiate community benefit agreements with developers.
- Moratorium lifts once Generic Environmental Impact Statement establishing consistent environmental standards is finalized.
Legislative backdrop
A farther-reaching moratorium, the Responsible Data Center Development Act, cleared the legislature in June but has not yet been sent to Hochul's desk. Officials in the governor's office described the bill as complicated and said it would take time to work through. The executive order allows Hochul to enact a first-in-the-nation pause while reviewing that legislation, and she has not indicated whether she will sign it.
National backlash grows
New York's action comes as resistance to data-center construction intensifies across the country. A Reuters/Ipsos poll found that only one-in-three Americans approve of the fast pace of data-center building, and most would oppose a facility in their own community. A Gallup survey similarly showed opposition from both Republicans and Democrats. President Trump sought to blunt the backlash by obtaining a pledge from tech companies to cover their own energy costs, but the industry is still racing to erect as many as 1,500 new data centers from Virginia to Washington state. Arizona Governor Katie Hobbs signed a three-year moratorium on new sales tax breaks for data centers in June, Maine's governor vetoed a statewide ban in April, and the Seminole Nation passed a complete moratorium in March.
