Governor Kathy Hochul of New York signed an executive order on Tuesday implementing a moratorium on the construction of large-scale data centers. The pause will remain in effect for up to a year and represents the first statewide ban of its kind in the United States. Hochul cited concerns about potential increases to utility bills, resource depletion, and grid uncertainty for residents as her rationale for the action.
The moratorium directs the state Department of Public Service to refrain from issuing new permits for large-scale data centers during the moratorium period. The agency has been instructed to conduct a comprehensive environmental analysis examining the effects of data centers on the state. Additionally, the department will undertake a proceeding to establish requirements that data centers either pay increased rates for energy consumption or develop their own power supplies.
New York lawmakers approved a more extensive data center moratorium in the previous month, though Hochul has not indicated whether she will sign that legislative measure. The executive order also tasked the state’s economic development agency with creating a negotiation framework for local communities to use when engaging with technology companies planning data center projects. This framework will address infrastructure enhancements, child care provisions, financial assistance, and labor standards.
Hochul additionally announced the establishment of a fund requiring data centers to contribute to improvements in New York’s electrical grid infrastructure and clean energy capacity. The governor called on state legislators to eliminate the sales tax exemptions currently available to large data centers. The push for restrictions comes amid nationwide growing opposition to data center development, driven partly by computing demands related to artificial intelligence expansion. Multiple cities and counties are preparing ballot measures to limit new data center development in their jurisdictions.
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