Key facts
- New York Governor Kathy Hochul signed an executive order enacting a one-year moratorium on new large data center construction.
- The moratorium applies to facilities requiring 50 megawatts or more of electricity.
- The order aims to develop environmental and energy grid rules, addressing power costs, resource strain, and water consumption.
- Smaller computing facilities for hospitals, universities, and financial services are exempt.
- New York is the first U.S. state to implement such a statewide moratorium.
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 signed an executive order enacting 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.
The moratorium deals a blow to New York’s data center pipeline. During this period, the state's Department of Environmental Conservation will not issue discretionary permits for new data centers that have not already been deemed complete. The executive order directs the Department of Public Service to form a working group within 60 days to address interconnection issues, and Empire State Development will issue a community investment framework within the same timeframe to guide local negotiations for community benefits.
Governor Hochul also stated her intention to pursue legislation to repeal sales tax exemptions for data centers. The moratorium is designed to give the state time to study the impact of data centers on communities and the environment and to enact new regulations. As of May, nearly 12 gigawatts of data center load requests were in the New York Independent System Operator interconnection queue, with more than 8 GW entering in 2025 alone.
The backlash against power-hungry data centers is also evident in other states. Virginia has seen its legislature approve a consumption tax and legislation requiring data centers to pay for transmission infrastructure, leading to the withdrawal of a major data center project. In Texas, Governor Greg Abbott has urged regulators to ensure data centers do not shift energy costs to residents and called for development bans in rural areas, with multiple counties enacting local moratoriums.