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New York Imposes One-Year Moratorium on Large Data Centers Amid AI-Driven Power Concerns
On Tuesday, Governor Kathy Hochul signed an executive order that temporarily bars the construction of any new data center that would draw 50 megawatts (MW) or more from the grid. The move marks the first statewide moratorium in the United States and will stay in force for one year while New York drafts environmental and energy standards for hyperscale facilities.
Under the order, the Department of Environmental Conservation must halt discretionary permits for projects that have not yet reached completion. Hochul said the pause is necessary because data centers are "hiking up utility bills, depleting natural resources, and creating uncertainty for New Yorkers." She also announced plans to pursue legislation that would end the sales‑tax exemptions currently granted to large data centers.
The moratorium applies to any facility that would consume 50 MW or more of power. During the pause, the state will produce a Generic Environmental Impact Statement that will establish consistent standards for future data center projects and evaluate the environmental impacts of their construction and operation.
Last month, the New York legislature passed a bill that would have imposed a broader restriction—targeting facilities that use more than 20 MW—but it has not yet been signed. Hochul’s office described the bill as "complicated" and said it would take time to work through with lawmakers.
Industry reactions were mixed. Digital Realty, a global data‑center operator, warned that the pause could push investment outside New York. "We’re committed to working with policymakers on solutions that support responsible growth, but a one‑year pause isn’t the right approach," the company told Reuters. NTT Global Data Centers CEO Doug Adams added that operators need to better explain the local impact of data centers, from jobs and economic investment to the use of environmental resources. "The heightened scrutiny reflects a desire for greater understanding of how data centers impact local communities. We welcome that conversation," he said. Equinix did not respond.
The decision comes amid a national debate over the rapid expansion of AI‑driven data centers. The U.S. has seen a surge in large facilities that power artificial‑intelligence workloads, which can consume up to 60 kilowatts per server rack—roughly six times the power of a general‑purpose rack. Analysts estimate that AI data centers will account for about 70 % of global computer‑memory purchases in fiscal 2026.
Power demand is a key concern. The International Energy Agency reported that data centers consumed 415 terawatt‑hours (TWh) in 2024, about 1.5 % of global electricity use, and that U.S. data‑center consumption will drive almost half of the country’s electricity growth through 2030. In New York, the state’s independent grid operator noted that more than 12 gigawatts of very large energy‑using loads—including data centers—were in line to connect to the grid as of May. One gigawatt can power roughly 750,000 homes.
Water use is another issue. A 2021 study estimated that data centers consumed 1.7 billion liters of water per day, with 57 % drawn from potable supplies. Local opposition has blocked or delayed $64 billion in projects between May 2024 and March 2025, according to a report by Data Center Watch.
Public sentiment reflects these concerns. A recent Reuters/Ipsos poll found that only one in three Americans approve of the fast pace of data‑center construction, and most would oppose building one in their own community.
New York’s high residential electricity prices—ranked eighth most expensive in the country—add to the urgency of the state’s decision. While the state has attracted some data‑center interest, it currently hosts just over 130 facilities compared with more than 600 in Virginia and about 500 in Texas.
The moratorium is a first step for New York, but it also signals a broader trend. Other states have introduced bills to limit the impact of data centers on power bills and the environment, and some have already enacted local bans. In April, Maine Governor Janet Mills vetoed a similar freeze.
The outcome of the moratorium will shape how the AI industry balances infrastructure growth with community and environmental concerns. The state’s next steps—finalizing the Generic Environmental Impact Statement and deciding whether to sign the 20 MW bill—will determine whether New York remains a destination for hyperscale facilities or becomes a cautionary example for the rest of the country.
The executive order is effective immediately and will be reviewed after one year, or sooner if the state completes its standards. Until then, no new data‑center projects that meet the 50 MW threshold may begin construction in New York.
Under the order, the Department of Environmental Conservation must halt discretionary permits for projects that have not yet reached completion. Hochul said the pause is necessary because data centers are "hiking up utility bills, depleting natural resources, and creating uncertainty for New Yorkers." She also announced plans to pursue legislation that would end the sales‑tax exemptions currently granted to large data centers.
The moratorium applies to any facility that would consume 50 MW or more of power. During the pause, the state will produce a Generic Environmental Impact Statement that will establish consistent standards for future data center projects and evaluate the environmental impacts of their construction and operation.
Last month, the New York legislature passed a bill that would have imposed a broader restriction—targeting facilities that use more than 20 MW—but it has not yet been signed. Hochul’s office described the bill as "complicated" and said it would take time to work through with lawmakers.
Industry reactions were mixed. Digital Realty, a global data‑center operator, warned that the pause could push investment outside New York. "We’re committed to working with policymakers on solutions that support responsible growth, but a one‑year pause isn’t the right approach," the company told Reuters. NTT Global Data Centers CEO Doug Adams added that operators need to better explain the local impact of data centers, from jobs and economic investment to the use of environmental resources. "The heightened scrutiny reflects a desire for greater understanding of how data centers impact local communities. We welcome that conversation," he said. Equinix did not respond.
The decision comes amid a national debate over the rapid expansion of AI‑driven data centers. The U.S. has seen a surge in large facilities that power artificial‑intelligence workloads, which can consume up to 60 kilowatts per server rack—roughly six times the power of a general‑purpose rack. Analysts estimate that AI data centers will account for about 70 % of global computer‑memory purchases in fiscal 2026.
Power demand is a key concern. The International Energy Agency reported that data centers consumed 415 terawatt‑hours (TWh) in 2024, about 1.5 % of global electricity use, and that U.S. data‑center consumption will drive almost half of the country’s electricity growth through 2030. In New York, the state’s independent grid operator noted that more than 12 gigawatts of very large energy‑using loads—including data centers—were in line to connect to the grid as of May. One gigawatt can power roughly 750,000 homes.
Water use is another issue. A 2021 study estimated that data centers consumed 1.7 billion liters of water per day, with 57 % drawn from potable supplies. Local opposition has blocked or delayed $64 billion in projects between May 2024 and March 2025, according to a report by Data Center Watch.
Public sentiment reflects these concerns. A recent Reuters/Ipsos poll found that only one in three Americans approve of the fast pace of data‑center construction, and most would oppose building one in their own community.
New York’s high residential electricity prices—ranked eighth most expensive in the country—add to the urgency of the state’s decision. While the state has attracted some data‑center interest, it currently hosts just over 130 facilities compared with more than 600 in Virginia and about 500 in Texas.
The moratorium is a first step for New York, but it also signals a broader trend. Other states have introduced bills to limit the impact of data centers on power bills and the environment, and some have already enacted local bans. In April, Maine Governor Janet Mills vetoed a similar freeze.
The outcome of the moratorium will shape how the AI industry balances infrastructure growth with community and environmental concerns. The state’s next steps—finalizing the Generic Environmental Impact Statement and deciding whether to sign the 20 MW bill—will determine whether New York remains a destination for hyperscale facilities or becomes a cautionary example for the rest of the country.
The executive order is effective immediately and will be reviewed after one year, or sooner if the state completes its standards. Until then, no new data‑center projects that meet the 50 MW threshold may begin construction in New York.
