Hochul Signs Nation's First State-Level Data Center Moratorium

Gov. Kathy Hochul on Tuesday signed an executive order imposing a moratorium — lasting as long as one year — on the construction of new large-scale data centers in New York, a move that makes the state the first in the country to enact such a restriction.

The order covers facilities with a power consumption capacity of 50 megawatts or above, a threshold the administration described as aimed at hyperscale operations used chiefly for artificial intelligence and cloud computing. Data centers that serve hospitals, schools, research institutions and financial back-office functions would not be affected by the order's provisions, Hochul said.

"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 said. While the moratorium is in effect, the state will issue no new discretionary permits for projects that meet the qualifying criteria. The order also reassigns the cost burden of data center operations from the general public to the facilities themselves, and instructs the Department of Public Service to carry out a generic environmental impact review.

Assembly Speaker Carl Heastie said he remained hopeful the executive order did not foreshadow a veto of the Legislature's broader omnibus data center bill, which sets a stricter threshold of 20 megawatts and contains additional provisions not addressed by the executive action.

"In my exchanges with her, this is not by any means mean that she's looking to veto the bill, she said she absolutely wants to continue to talk about it," Heastie said Tuesday.

State Sen. Kristen Gonzalez, who chairs the Senate Internet and Technology Committee and authored a moratorium bill of her own, welcomed the executive order as progress. Republican Assemblyman Scott Gray warned that moratorium language could deter developers from investing in New York, though he expressed optimism that the order might indicate Hochul would ultimately reject the omnibus bill's more demanding provisions, including a 90 percent renewable energy requirement.

Environmental advocacy group Earthjustice said it would keep a close watch on how the order is carried out while continuing to press for the broader legislative package. Technology industry groups condemned the move.

Hochul said she needed time to assess whether the omnibus bill's provisions were viable before deciding to sign or veto it — a determination she typically holds until the end of the year on significant legislation.