Key facts
- New York has enacted a one-year moratorium on the construction of large new data centers.
- The moratorium applies to facilities requiring 50 megawatts or more of power.
- Governor Kathy Hochul cited concerns over rising power costs, water supply strain, and community impact.
- The state will develop new environmental impact standards for data centers.
- Legislation to repeal sales tax exemptions for large data centers is also being pursued.
New York has become the first U.S. state to implement a one-year moratorium on the construction of large new data centers, a move driven by growing concerns over the environmental and economic impacts of these facilities. Governor Kathy Hochul announced the ban, which applies to data centers requiring 50 megawatts or more of power, citing issues such as increased utility bills, depletion of natural resources, and strain on local communities.
During the moratorium, the state's Department of Environmental Conservation will not issue discretionary permits for new data centers that have not already been deemed complete. The governor's office stated that officials are tasked with developing a Generic Environmental Impact Statement (GEIS) to establish consistent environmental standards for new data centers and to examine their potential impacts.
The construction ban is set to be lifted once these new standards are finalized. Hochul also indicated her intention to pursue legislation aimed at repealing the sales tax exemptions currently afforded to large data centers. This action comes as data center development accelerates nationwide, fueled by the artificial intelligence boom, leading to increased power demand and drawing significant public and political scrutiny.
A recent Reuters/Ipsos poll revealed that only one in three Americans approve of the rapid construction of data centers, with a majority opposing their development in their own communities. While numerous state legislatures have introduced bills to regulate data centers, New York is the first to enact a comprehensive moratorium. Previously, Maine Governor Janet Mills vetoed a similar bill in April.
As of May, New York's independent grid operator reported over 12 gigawatts of very large energy-using loads, including data centers, awaiting connection to the state's grid. Data from the U.S. Energy Department indicates that New York has the eighth-most expensive residential electricity prices in the country.