New York enacts one-year moratorium on large data centers

New York announced a one-year moratorium on construction of data centers that draw 50 megawatts or more of electricity. The pause, declared Tuesday, prevents the state Department of Environmental Conservation from issuing discretionary permits for covered projects unless applications are already complete.

Governor Kathy Hochul directed state agencies to prepare a Generic Environmental Impact Statement, or GEIS, to develop uniform standards for siting, construction and operation of large facilities. The governor’s office said Hochul will pursue legislation to repeal sales tax exemptions available to some data centers. Hochul wrote in a statement: “it’s my responsibility to take action and lead.”

The GEIS will examine environmental effects and provide statewide rules that officials intend to apply once the review is complete. The moratorium will remain in place until those standards and the environmental review are finished.

Pressure on New York’s power system has increased as demand for computing infrastructure has grown. The state’s independent grid operator reported more than 12 gigawatts of very large energy-consuming loads, including proposed data centers, were awaiting grid connection as of May. Federal data show New York ranks among states with the highest residential retail electricity prices, a factor cited by state officials in explaining the pause.

New York’s legislature approved a bill last month that would add guardrails for data center development, but the measure has not reached the governor’s desk. State officials described the legislation as complex and indicated it will take time to resolve details.

Officials in several other states have proposed measures to limit the impact of large data centers on local electric systems and communities. New York is the first state to impose a full moratorium on new facilities that meet the 50-megawatt threshold; the temporary ban will be lifted after the GEIS and related standards are completed.