New York Freezes New Data Centers for a Year

The New York State legislature has passed a one-year moratorium on new large data centers, a measure that would establish the first statewide ban of its kind if signed into law by Democratic Governor Kathy Hochul.

Proponents of the legislation state its primary objective is to allow policymakers ample time to understand the full impact of large data centers on the environment and energy prices. The bill directs the state’s environmental agency to develop a comprehensive impact report, assessing the electricity, water, and land consumption of these facilities, as well as the pollution they generate. Additionally, it mandates that companies planning to construct large data centers — defined as those with a peak demand of at least 20 megawatts — must host and fund a public hearing at least three months before seeking project approval. Governor Hochul has not yet indicated whether she will sign the bill and, according to Bloomberg Government, has until December to make her decision to either sign or veto it.

Public opinion surveys reveal widespread opposition among Americans to the presence of data centers in their communities, with contentious public meetings across the nation underscoring this as a galvanizing issue spanning the political spectrum. Earlier this year, Maine's legislature passed a bill that would have prohibited new data centers until late 2027, but Democratic Governor Janet Mills vetoed it due to its failure to include an exemption for a previously planned project, as reported by The New York Times. In New York, the Independent System Operator, a nonpartisan entity responsible for maintaining electric grid reliability, is currently reviewing 24 data center proposals totaling over 9,000 megawatts, according to News10 ABC. A proposed 180-megawatt project in Albany, in particular, has already sparked considerable local concern.

While the New York bill proposes a shorter, one-year moratorium compared to a previously introduced three-year proposal, as noted by Politico, even this temporary pause has generated pushback from industry groups. Stacey Sikes, acting president and CEO of the Long Island Association, conveyed to Politico that the moratorium would “overall be damaging to the state’s economy, because having a blanket moratorium instead of looking at it at a case by case basis would not allow the state to move forward on a data center project that would actually be helpful to our economy.”

Following the bill's passage, Governor Hochul’s office did not immediately respond to a request for comment. However, spokesperson Kathy Devoe had previously stated to Politico in an earlier statement, “The Governor will review the bill.”