NEW YORK, N.Y. (WBNG) — Gov. Kathy Hochul signed an executive order on Tuesday creating what her office called the nation’s first moratorium on new hyperscale data centers, temporarily pausing certain state environmental permits for up to a year while New York develops a statewide framework to regulate the fast-growing industry.
During a conference on Tuesday, July 14, Hochul said that New York is seeing a surge in proposals for large-scale data centers driven by artificial intelligence and other computing needs, with projects that can require major amounts of electricity and water to power and cool thousands of servers. The executive order directs the state to use the pause to craft standards aimed at protecting utility customers, the environment, the power grid, and host communities.
“The bottom line is progress shouldn’t arrive with a higher utility bill, depleted water supply, or noise pollution,” Hochul said. “So we have no choice but to address these challenges created by these massive facilities.”
Hochul’s office said the moratorium will remain in place while the Department of Public Service develops a Generic Environmental Impact Statement, a process expected to take up to a year. During that time, the Department of Environmental Conservation (DEC) will not issue discretionary permits for new data center projects unless applications have already been deemed complete, according to the governor’s office. The environmental review will examine impacts tied to energy demand, water use and quality, and air quality.
Hochul has also directed regulators to ensure data centers do not drive up electric costs for other customers. Earlier this year, she ordered the Department of Public Service to begin an “Energize NY” proceeding that would require large data centers to either supply their own energy or pay more to draw power from the grid.
“New York will require data centers to either produce their own energy or pay a premium to tap into our grid,” Hochul said, arguing the step is needed to protect affordability as power capacity tightens.
Once the state finalizes its standards, the moratorium will be lifted, and projects could move forward if they meet state requirements and local zoning and approval rules, the administration said.
The executive order also directs Empire State Development to issue a Community Investment Framework within 60 days to help local governments negotiate community benefits tied to large data center projects, including infrastructure improvements, child care investments and direct financial support. Hochul said communities should see clear returns if they accept the projects.
“I want to make sure that if they’re going to come, those localities will reap substantial benefits,” she said.
In addition, Hochul is directing regulators to consider a New York Grid Acceleration Fund that would require data centers to contribute to grid upgrades and new energy needs, including potential support for clean energy supply and other measures meant to reduce uncertainty and costs for ratepayers. Hochul is also pursuing legislation to repeal sales tax exemptions for large data centers statewide.
The administration tied the actions to Hochul’s broader push to position New York as a leader in AI development while expanding safeguards around digital safety and responsible technology use.
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