ALBANY — Gov. Kathy Hochul on Tuesday enacted the first data center moratorium in the nation with an executive order.
Sharing details in a press release and a briefing hosted by her office, Hochul’s order requires the state’s regulatory agencies to pause new permit approvals for data center projects that plan to use more than 50 megawatts of power at any one time. According to her office, the pause will last one year while state agencies pull together a comprehensive regulatory framework for data center projects.
Hochul also ordered the state Public Service Commission to conduct a generic environmental review of the impact that data centers already in operation have had on energy, land and water use.
“As data center development threatens to hike up utility bills, deplete our natural resources and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Hochul said in a prepared statement. “New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too.”
The moratorium comes as the latest move from Hochul to prepare New York for the boom in data center construction seen as artificial generative intelligence services become more popular. The “AI data centers” have become points of contention across the country as companies seek to build the large, industrial computing centers. Complaints about noise, water pollution, spiking energy demand and higher prices have come with many of the new data centers.
Earlier this year, Hochul ordered the PSC to create a new set of regulations that will require new data centers to either pay higher rates for power taken from the grid or provide their own eco-friendly power solutions.
According to Hochul’s office, the ban on new data center permits will stay in place until the PSC completes its generic environmental review and uses those findings to set new regulatory standards on data center projects. Once the moratorium is lifted, new projects will only be allowed to proceed if they fit state and local standards.
Hochul has also asked Empire State Development, the state’s economic development agency, to create a “Community Interest Framework” within 60 days, which she said can be used by local approval agencies to help them negotiate deals with the companies that build and maintain data centers.
Hochul’s order is aimed at what she’s defined as “hyperscale” data centers, defined as any center that takes more than 50 megawatts of power to operate. According to her office, that threshold was selected to allow hospitals, education centers and other entities to continue to build the data centers they need for regular operations.
The moratorium comes as Hochul was set to review legislation passed by the state legislature this year that sought to enact a blanket one-year ban on new data centers. According to Hochul’s office, she’s still discussing the details of that bill with the lawmakers who passed it, but wanted to move on a more simple moratorium while those talks continue.
Hochul said she also plans to work with the legislature to pass other data-center related legislation, including a bill to repeal the sales tax exemptions that have been put in place for some large data centers already in operation.