New York Halts Approval for New Data Center Construction

New York State has implemented a significant pause on the approval of new permits for large data center construction projects. Governor Kathy Hochul signed an executive order yesterday that takes immediate effect, preventing the state's Department of Environmental Conservation (DEC) from issuing permits for data center projects requiring 50 megawatts or more of capacity.

The order potentially impacts over a dozen projects currently in development. Governor Hochul cited growing concerns regarding the substantial increases in electricity consumption, water usage, and the need for local control as key drivers for the decision. The rapid expansion of data centers, fueled in part by AI advancements, has amplified these concerns.

"Progress should not arrive with a higher utility bill, depleted water supply, or noise pollution," Hochul stated at a press conference. "These data centers should only be built in places that want them. They will never be exempt from local zoning, local approvals."

The moratorium will remain in place until the state finalizes an environmental review process specifically for data centers, which Hochul anticipates will take approximately one year. The administration is also considering requiring data centers to contribute to a fund supporting the state's electrical grid and is looking to prevent hyperscale data centers from receiving tax incentives.

Legislative efforts in New York are also advancing more stringent measures. Last month, the state legislature advanced a bill that would pause the construction of data centers larger than 20 megawatts for one year. This state-level action marks a notable shift in managing the expansion of data infrastructure and prioritizing environmental and local considerations amidst technological growth.