New York halts permits for large data centers citing electricity and water concerns

New York Governor Kathy Hochul signed an executive order to temporarily halt the approval of new permits for large data centers, making the state the first in the U.S. to impose such a moratorium. The order applies to projects 50 megawatts or larger, which could affect more than a dozen planned developments.

Hochul framed the decision as a response to concerns over electricity costs, water supply, and local control, stating at a press conference that “progress shouldn’t arrive with a higher utility bill, deleted water supply, or noise pollution.” The moratorium will remain in place until the state finalizes an environmental review process for data centers, which Hochul expects to take about a year.

The executive order arrives as the state legislature considers additional measures, including a bill to pause construction of data centers larger than 20 megawatts for one year and another proposing a three-year moratorium. The average data center built in recent years has been smaller than 100 megawatts, but projects in development are expected to be significantly larger due to rising AI-driven computing demands.

Through 2030, nearly a quarter of new data centers are projected to exceed 500 megawatts, according to BloombergNEF, reflecting the scale of AI-related infrastructure growth. The idea of a data center moratorium has been debated at state and federal levels, but New York is the first to implement one. More than 230 organizations called for a nationwide pause on new data centers in December, and Sen. Bernie Sanders has proposed a federal moratorium, though neither has advanced beyond discussion.

Public sentiment has shifted against data centers as their size and pace of construction strain regional resources such as electricity grids, water supplies, and farmland. Polling indicates two-thirds of respondents are concerned about data centers driving up electricity prices, and some surveys suggest people prefer warehouses to data centers as neighbors.