New York enacts first US data center moratorium
▼ Summary
– New York Governor Kathy Hochul signed the first statewide moratorium blocking new environmental permits for hyperscale data centers over 50 megawatts for up to a year.
– The moratorium aims to protect residents from rising energy prices and environmental impacts while the state develops new regulations.
– Hochul’s executive action sets a higher threshold than the 20 megawatt limit in a legislative bill, which she is still reviewing for potential signature.
– The Department of Public Service will create standards to assess environmental impacts, including water use and air quality, during the pause.
– Hochul plans to push for rolling back sales tax exemptions for large data centers when the legislature returns next year.
New York has become the first state in the nation to enact a temporary halt on new hyperscale data center construction, as Governor Kathy Hochul signed an executive order that blocks environmental permits for facilities exceeding 50 megawatts. The moratorium, which could last up to a year, is designed to give regulators time to craft rules that safeguard residents from rising energy costs and environmental degradation.
The governor’s action sets a higher bar than the 20-megawatt limit that state lawmakers had previously approved. While Hochul’s office could not immediately specify how many projects would be affected, it emphasized that the threshold aims to avoid disrupting smaller data centers, such as those serving hospitals. The executive order takes effect immediately, even as Hochul reviews a separate bill passed by the legislature that could impose even stricter restrictions. She has not yet indicated whether she will sign that measure.
“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,” Hochul said in a statement. The moratorium will remain in place while the Department of Public Service (DPS) develops standards to evaluate environmental impacts from data center construction and operation, including effects on water use and air quality.
Hochul also directed DPS to explore options for requiring data centers to invest in the state’s energy infrastructure. Meanwhile, she tasked New York’s economic development arm with creating a framework to help local communities negotiate benefits when data centers seek to build in their areas.
The move comes after Maine nearly became the first state to pass a similar moratorium, only to have its governor veto the bill in April. Across the country, communities are wrestling with a surge in data center construction, driven largely by AI’s accelerating demand for computing power, and many fear the impact on energy prices and the environment. The debate over government subsidies for such developments has become a flashpoint, and Hochul announced Tuesday that she intends to push the legislature to roll back sales tax exemptions for large data centers when lawmakers return next year.
(Source: The Verge)
