New York becomes the first state to enact a moratorium on data centers

New high-volume data centers can’t set up shop in New York for up to a year now after Gov. Kathy Hochul (D) signed the first statewide moratorium. But a bill passed by the state Legislature that could restrict further development is still awaiting her signature.

The order blocks new environmental permits for data centers larger than 50 megawatts, which the governor’s office says will give the state time to develop regulations needed to protect residents from rising energy prices and environmental impact. This is above the 20 MW threshold State lawmakers approved it. Hochul’s office could not immediately say how many proposals would be affected by the order, but says the minimum is intended to prevent disruption to smaller data centers used by organizations such as hospitals. Hochul has not yet said whether she will sign the moratorium passed by the Legislature, but the executive action allows her to enact a temporary moratorium for the first time in the nation while the bill is reviewed.

“As data center development threatens to raise utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it is my responsibility to take action and lead,” Hochul said in a statement. The moratorium could last up to a year as the Department of Public Service (DPS) comes up with criteria to evaluate the expected environmental impacts of building and operating the data center, including water use and air quality. Hochul is also asking DPS to consider creating a way for data centers to invest in the state’s energy infrastructure, and is tasking the state’s development arm with creating a framework to help local communities negotiate benefits when data centers try to come to the city.

Maine nearly became the first state to pass a data center moratorium before this The governor vetoed the bill In April. Communities across the country are grappling with a wave of infrastructure construction that they fear will impact energy prices and the environment as artificial intelligence accelerates demand. Government support for data center development has become one of the issues motivating many residents, and Hochul also said Tuesday that she plans to push the Legislature to eliminate sales tax breaks for large data centers in the state when it returns in session next year.