New York halts new data center construction for one year

Gov. Kathy Hochul signed an executive order that froze new large data center construction in New York for one year, giving state officials time to write rules for the electric grid, water resources and utility ratepayers. The move makes New York the first statewide data-center moratorium in the United States.

The pause applies to hyperscale data centers, including facilities needing 50 megawatts or more of power. Existing permits already issued are not expected to be affected, and smaller or public-interest facilities such as hospitals and universities are excluded. For developers and the utilities that would supply them, the order means a one-year delay. For nearby residents and ratepayers, the order is meant to prevent higher bills and preserve scarce water and power capacity.

Hochul tied the order to rising utility costs and natural-resource strain, and said she also wants lawmakers to repeal sales-tax subsidies for large data centers when they return to Albany in January.

The executive action followed a separate legislative fight that reached both chambers in June. The Responsible Data Center Development Act passed the State Senate 44-16 and the Assembly 102-39, then stalled as Hochul chose to act by order rather than wait for the next legislative round. The bill, sponsored by Sen. Kristen Gonzalez and Assemblymember Didi Barrett, would have required an environmental impact report, public hearings before future permits, separate electric and water rate classes for large data centers, and new rules on energy efficiency, labor standards and host-community benefits.

The measure grew out of years of legislative work and more than 60 memoranda of support. Supporters in the legislature, including Assembly Speaker Carl Heastie, said the pause would let New York study community and environmental impacts. The Assembly bill memo called the measure the first of its kind in the nation.

Gonzalez’s office put the New York State Independent System Operator queue at 28 large data centers that could add 9,682 megawatts of load. Environmental and consumer groups that backed the moratorium warned that explosive data-center growth could raise bills, consume large amounts of water and strain an aging grid.