New York Gov. Kathy Hochul on July 14 signed an Executive Order to create the nation’s first moratorium on new hyperscale data centers, “establishing the strongest standards for data center development and creating a blueprint to support localities,” her office said.
Hochul is temporarily pausing state environmental permits for up to one year “in order to build a nation-leading regulatory framework that protects ratepayers, the environment, the energy grid and communities across the state,” a news release said.
The EO is available on the governor's website.
New York State “is experiencing unprecedented growth in demand for data center development driven by artificial intelligence and other computing operations. The increase in demand has led to proposals across the state for the construction and operation of data centers that could require massive amounts of energy and water to run and cool thousands of computer servers,” Hochul’s office said.
Earlier this year, Hochul directed the Department of Public Service (DPS) to begin the Energize NY proceeding, "which will require data centers to either pay more for their energy or supply their own, allowing the state to keep energy more affordable for New Yorkers," the news release said.
As part of that proceeding, the Governor is now also directing DPS to develop a Generic Environmental Impact Statement (GEIS) for data centers to ensure new data centers coming online are being held to consistent standards.
During the development of this GEIS, which will take up to a year, a moratorium will be in place and the Department of Environmental Conservation (DEC) will not issue any discretionary permits not already deemed complete.
The state will use the GEIS to assess the potential environmental impacts of the construction and operation of data centers in the state, including their effect on energy demand, water use and quality, and air quality. Once the state finalizes these standards, the moratorium will be lifted, allowing new data center projects to proceed as long as they follow state, zoning code and other local approvals.
Hochul also directed Empire State Development (ESD) to issue a Community Investment Framework (CIF) within 60 days, which will provide clear guidance to local entities to help them negotiate community benefits as part of any large-scale data center deal, including local infrastructure improvements, child care investments, and direct financial support for their community.
"The CIF will also establish frameworks that provide organized labor a seat at the table and prioritize prevailing wage standards and project labor agreements for data center construction, local hiring, apprenticeships and workforce development to maximize economic benefits," the news release said.
This framework will additionally include a formula to help communities assess where to begin investment negotiations. An outline of the CIF is currently available on ESD’s website, and the public is encouraged to submit feedback.
Additionally, the Governor is directing DPS to consider creating a New York Grid Acceleration Fund to require data centers "to invest in the state’s aging grid infrastructure and energy needs so all New Yorkers benefit from responsible development," her office said.
The fund could support the procurement of new clean energy supply and establishment of an insurance pool to which developers may need to contribute to protect against speculative large loads that create uncertainty and increase costs.
DPS will also consider approaches to require data centers to fund new clean electric generation dedicated to their operations, including but not limited to customer-sited distributed energy resources and battery storage.
Hochul is also pursuing legislation to repeal sales tax exemptions for massive data centers across the state.
