New York to Enact Nation’s First Statewide Data Center Moratorium

New York is moving to halt approvals for new large-scale data centers for as long as a year while officials develop rules aimed at shielding the environment and the electric grid from the heavy demands of facilities powering artificial intelligence.

Gov. Kathy Hochul is expected to sign an executive order Tuesday morning creating what would be the nation’s first statewide pause on hyperscale data centers, massive sites filled with thousands of servers that consume substantial electricity and depend on consistent water supplies for cooling.

“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, a Democrat, said in a statement.

Under the order, state permitting for new major data center projects would be put on hold as regulators draft standards covering environmental effects, electricity needs, water consumption and related considerations, according to the governor’s office.

Technology firms and other supporters of data center expansion argue that blocking such projects can undermine local job creation and weaken the United States’ position against China in the fast-moving competition to dominate artificial intelligence.

Maine appeared close to adopting a similar pause earlier this year, but Democratic Gov. Janet Mills vetoed the proposal, saying it would have stopped a planned data center in a community still recovering from the shutdown of a local mill. Similar moratoriums have been introduced in at least a dozen states without gaining much traction, though some counties and cities have enacted temporary bans of their own.

The New York move also lands in a politically sensitive moment for Hochul’s reelection bid and for competitive congressional races across the state this fall, as Democrats try to respond to voter concerns about affordability, including steep utility costs. Earlier this year, Hochul eased parts of New York’s aggressive greenhouse gas reduction targets, pointing to rising energy expenses for households.

Hochul’s Republican challenger, Nassau County Executive Bruce Blakeman, has rejected a statewide moratorium, arguing that local governments should be free to negotiate data center agreements with technology companies when the projects offer sufficient economic upside.

The state Legislature this year approved its own moratorium bill, but Hochul’s office described the legislation as complex and said it needed additional work. Instead, the governor is opting for an executive order that would take effect immediately once signed.

New York, at this stage, has not been a destination for the biggest hyperscale data centers.