New York Imposes First Statewide Moratorium on Data Centers

New York Gov. Kathy Hochul signed an executive order on July 14 ordering a statewide moratorium on large data centers, making it the first state in the country to suspend construction of the server farms.

Hochul’s order halts the construction and expansion of data centers for up to a year while state regulators develop standards to address the energy demand, environmental impacts, and water usage of hyperscale data centers.

The statewide moratorium applies to data centers that use 50 megawatts or more of energy.  The governor’s order came after the state Legislature passed a bill in June to pause construction of data centers that use 20 megawatts or more.

The debate over data centers has received national attention as some local governments have instituted moratoriums on data center construction due to concerns of increased energy costs and pollution.

Major technology firms have denied that data centers increase energy costs and have emphasized how data centers can lead to major economic benefits, such as more jobs.

In a Tuesday video message, Hochul, a Democrat, said that the development of massive data centers across the state has led to an “unprecedented demand” for energy and water resources and could cause an increase in utility costs.

“Before it goes any further, I need safeguards in place to protect New Yorkers,” she said. “That’s why I’m signing the country’s first moratorium on new hyperscale AI data centers, giving us the time to establish the nation’s strongest protections for ratepayers, our communities, and our energy grid.”

Hochul’s executive order directed the state Department of Environmental Conservation to temporarily suspend applications for the construction or expansion of data centers. The order applies to permit applications that the department had not previously determined to be complete before the governor’s order.

The executive order also directed the state Department of Public Service to examine data centers’ impact on the state’s electric grid and to develop an environmental impact statement. The Department of Environmental Conservation will be required to submit a report within one year regarding potential regulatory and policy actions needed to address concerns with large data centers across the state.

“This is a critical moment, and New York is going to take the time to get it right,” Hochul said.

Legislation

In June, the New York Legislature passed a bill that would implement a one-year moratorium on permits for new data centers.

If signed by the governor, it would apply to data centers that draw 20 megawatts or more of power from the electric grid at peak use. The legislation also would require data centers to increasingly use renewable energy resources, with 90 percent of the centers’ energy required to come from renewable sources by 2040.

Officials in the governor’s office previously described the state Legislature’s bill as complicated and said it would “take some time to work through” the bill with the Legislature.

After the Legislature approved the moratorium on data centers last month, St. Lawrence County legislator Rita Curran said that data center moratoriums should be determined by local governments.

“I just feel like the people who live here and the people who govern here should have some ability to be part of the discussion versus everything being ruled by people that have never been here,” Curran said.

Curran told The Epoch Times that a statewide moratorium on data centers could hinder “any development at all.”

The Data Center Coalition, which includes Amazon, Google, Microsoft, Meta, and other top technology firms, shared a report earlier this year that said there was no evidence that data centers were driving up residential electricity costs.

The coalition also said a report showed the U.S. data center industry contributed $926.9 billion to the country’s gross domestic product in 2024 and supported 5.5 million jobs.

Nassau County Executive Bruce Blakeman, a Republican who is running against Hochul in the state’s gubernatorial election in November, has also opposed the implementation of a statewide moratorium.

Instead of the state directing data center regulations, he said, local governments should be allowed to approve data center projects if companies promise enough economic benefits for local communities.

New York is not the only state to consider a ban on the construction of new data centers. Maine legislators approved a bill that would have temporarily suspended the construction of data centers that require more than 20 megawatts. Gov. Janet. Mills, a Democrat, vetoed the bill in April.