New York Hits Pause on Data Centers
The first statewide development moratorium comes as pushback to the facilities persists.
New York on Tuesday became the first state to enact a moratorium on the development of hyperscale data centers. The action, which came through an executive order by Gov. Kathy Hochul, lasts for one year.
The order applies to projects of 50 megawatts or more and prohibits the state from providing environmental permits for those projects. The purpose of the moratorium, Hochul said at a news conference, is to develop a regulatory framework for future developments.
“The bottom line is progress shouldn’t arrive with a higher utility bill, depleted water supply or noise pollution,” Hochul said. “So, we have no choice but to address these challenges created by these massive facilities.”
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Hochul also said she would be pursuing legislation to repeal sales tax exemptions for large data centers.
In June, a measure passed the New York State Legislature that would ban data center projects of 20 megawatts or larger and impose energy efficiency standards for those larger than 1 megawatt. While Hochul has not yet signed that legislation, she said she is continuing to consider it.
Data center backlash grows
Hochul’s order comes as data center developers continue to navigate a nationwide pushback against the facilities, with policymakers at all levels of government reacting to concerns about rising electricity rates, water use and noise pollution.
While New York is the first state to adopt a construction moratorium, nearly 70 similar proposals were adopted this year through May at the local level, including in Denver and Oakley, Calif. Another statewide moratorium in Maine that passed the state legislature was vetoed by Gov. Janet Mills in April.
In a statement to Commercial Property Executive, Dan Diorio, executive vice president of state policy and government affairs at the Data Center Coalition, said the moratorium overlooks the benefits that data centers can provide, such as attracting advanced manufacturing and employment opportunities.
“Gov. Hochul’s statewide moratorium on data centers will ensure that those investments, jobs and economic activity flow elsewhere rather than to New York, with impacts far beyond the data center industry,” Diorio said.
This is a developing story. Check back with CPE for updates.
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