New York Becomes First State To Impose Data Center Moratorium

New York has become the first U.S. state to impose a moratorium on large new data centers, pausing construction for one year over concerns that AI-driven data center growth is raising utility bills, straining water supplies, and burdening communities. “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,” said New York Governor Kathy Hochul. She will also pursue legislation to repeal sales tax exemptions for large data centers, Hochul added. Reuters reports: The construction ban will apply to data centers that use 50 megawatts or more of power, officials in the governor’s office said. During the moratorium, the state’s Department of Environmental Conservation will not issue any discretionary permits not already deemed complete, the governor’s office said. Instead, Hochul directed state officials to develop a Generic Environmental Impact Statement to ensure that new data centers coming online are held to “consistent standards,” as well as examine the potential environmental impacts of the construction and operation of data centers in the state. The ban will be lifted once the state finalizes those standards, according to Hochul’s office.