Energy: NY Becomes First State To Hit Pause On Giant Data Centers
India-West News Desk
ALBANY, NY – New York Governor Kathy Hochul has signed an Executive Order establishing the nation’s first statewide moratorium on new hyperscale data centers, temporarily halting discretionary environmental permits for up to one year while the state develops new rules governing large AI-powered data centers.
The order applies to new hyperscale data center projects whose environmental permit applications have not already been deemed complete. During the moratorium, state agencies will develop uniform standards to address the impact of large data centers on electricity demand, water resources, air quality, local communities and the power grid.
“New York has always been at the forefront of innovation and change, but we’ve also always guaranteed that New Yorkers benefit,” Hochul said in a statement. “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.”
The Executive Order comes amid a surge in proposals for AI-powered data centers across New York. State officials say the facilities require vast amounts of electricity and water to power and cool thousands of computer servers, raising concerns about energy demand, environmental resources and electricity costs.
As part of the initiative, the Department of Public Service will prepare a statewide Generic Environmental Impact Statement to study how large data centers could affect electricity demand, water use and water quality, and air quality. Once the review is complete and new standards are adopted, the moratorium will be lifted, allowing projects that comply with state requirements, local zoning rules and other applicable approvals to proceed.
The Governor further directed DPS to examine creating a New York Grid Acceleration Fund that could require data center developers to help finance upgrades to the state’s aging electric grid and support additional clean energy resources. The agency will also consider requiring developers to fund clean electricity generation dedicated to their operations, including distributed energy resources and battery storage.
In addition, Hochul said she will pursue legislation to repeal state sales tax exemptions for large-scale data centers.
