This moratorium places New York at the forefront of a burgeoning national conversation about managing the infrastructure necessary to back artificial intelligence. As tech companies hurry to establish new data centers, lawmakers and regulators across various states are considering measures to mitigate their impact on electricity grids, utility expenses, and local neighborhoods.
“As the development of data centers threatens to elevate utility costs, exhaust our natural resources, and create uncertainty for New Yorkers, I feel it is my duty to act and take the lead,” Hochul stated, noting her plans to advocate for the repeal of sales tax exemptions granted to large data centers.
The construction prohibition will target data centers that utilize 50 megawatts or more of electricity, officials from the governor’s office confirmed.
During this moratorium, the state’s Department of Environmental Conservation will refrain from issuing any discretionary permits that are not already classified as complete, as per the governor’s office.
Hochul has instructed state officials to formulate a Generic Environmental Impact Statement (GEIS) to ensure that new data centers adhere to “consistent standards,” while also analyzing the potential environmental implications of their construction and operations in the state.
The moratorium will end once the state establishes these standards, according to Hochul’s office.
DATA CENTERS SPARK BACKLASH
Last month, New York’s legislature approved a bill aimed at placing restrictions on data centers, but it has yet to be sent to Hochul for approval. Officials from her office characterized the bill as complex, indicating that “it’s going to take some time to navigate” with the state legislature.
The growth of data centers across the US is contributing to increased power demands—and accompanying electricity bills—across many regions, prompting local and political pushback.
According to a recent Reuters/Ipsos poll, only one-third of Americans approve of the rapid pace of data center construction, with many opposing such facilities in their own communities.
Numerous state legislatures have introduced bills aimed at curbing the impacts of data centers on energy costs and the environment. New York stands as the first to impose a full moratorium.
In April, Maine Governor Janet Mills vetoed a bill that sought to implement a similar pause on data center development.
As of May, over 12 gigawatts of substantial energy-consuming projects, including data centers, were awaiting connection to the state’s grid, according to a recent report by New York’s independent grid operator. The state ranks eighth in the nation for the highest retail electricity prices for residential users, based on data from the US Energy Department.
