New York governor orders first statewide data center moratorium

Alex Brown

(Stateline) New York Gov. Kathy Hochul, a Democrat, issued an executive order Tuesday that puts a moratorium on the construction of large-scale data centers.

The pause, which will last up to a year, is the nation’s first statewide ban on data centers, which have drawn increasing concern from lawmakers and citizens based on their impact on electricity prices and the energy grid.

Missoula County issued Montana's first moratorium on data centers earlier this month.

“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 statement.

Technology companies have invested billions of dollars to build data centers all across the country, driven in part by the computing demands from artificial intelligence.

In her executive order, Hochul directed the state Department of Public Service to issue no new permits for large-scale data centers for a year. During that period, the agency will conduct an environmental analysis on the impacts of data centers, along with a proceeding to “require data centers to either pay more for their energy or supply their own.”

New York lawmakers passed a more extensive data center moratorium last month, but Hochul has not said whether she will sign the bill.

Maine Gov. Janet Mills, also a Democrat, vetoed a measure earlier this year that would have been the first statewide data center ban.

In a news release, Hochul also directed the state’s economic development agency to develop a framework that local communities can use to negotiate with tech companies that seek to construct data centers. That framework will focus on infrastructure improvements, child care investments, direct financial support and labor and wage standards.

She also announced plans for a fund that would require data centers to invest in New York’s grid infrastructure and clean energy supply. And she called on lawmakers to repeal the state’s sales tax exemptions for large data centers.

Across the country, data centers have drawn vocal opposition at local public meetings and in state capitols. Several cities and counties will vote on ballot measures this year to restrict the development of new data centers.