New York Enacts One-Year Moratorium on New Data Centers

The New York State legislature has enacted a one-year pause on the establishment of new large data centers, marking a significant first if Democratic Governor Kathy Hochul approves it. The lawmakers behind this initiative aim to provide time for a thorough examination of how large data centers affect the environment and energy costs. The legislation mandates the state’s environmental agency to compile a report evaluating the electricity, water, and land usage of data centers, along with the pollution they generate. Additionally, companies intending to construct large data centers—defined as those with a peak demand of at least 20 megawatts—must conduct and finance a public hearing at least three months prior to seeking project approval. Governor Hochul has yet to announce her decision on the bill, with a deadline to sign or veto it by December.

Public sentiment appears largely against data centers in local communities, as evidenced by intense discussions at public meetings nationwide, highlighting the issue’s significance across various political views. Earlier this year, Maine’s legislature attempted to impose a ban on new data centers until late 2027, but Democratic Governor Janet Mills vetoed the measure due to its lack of an exemption for a pre-planned project. The New York Independent System Operator, responsible for ensuring electric grid reliability, is currently evaluating 24 data center proposals that collectively demand over 9,000 megawatts, with a proposed 180-megawatt project in Albany raising concerns among residents.

This New York bill represents a shorter moratorium than a previously suggested three-year halt. However, even this one-year pause has faced criticism from industry representatives. Stacey Sikes, acting president and CEO of the Long Island Association, expressed to an outlet that the moratorium could harm the state’s economy, arguing that a blanket ban prevents the state from advancing beneficial data center projects. A spokesperson for Governor Hochul stated that the Governor will review the bill.