New York enacts first US ban on data center construction

New York enacts first US ban on data center construction

New York has become the first US state to place a moratorium on the construction of data centers. Governor Kathy Hochul signed an executive order barring the state from approving data centers using 50MW or more, as reported by The Washington Post.

The executive order pauses environmental permits for large data centers (consuming more than 50 megawatts) for up to a year. This would give state officials the required time to create rules protecting the electrical grid, environment, and local communities.

"New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too," said Hochul at a press conference.

The order will take effect immediately and not affect projects that already have the required permits.

Separate Legislation

The executive order is separate from New York's Responsible Data Center Development Act, recently passed by the state legislature last month. That bill would have also banned data center permits for a year, while also requiring energy efficiency goals for data centers and specific benefits for host communities. Governor Hochul has yet to sign that bill but is considering it. She has previously expressed support for AI as a potential research tool and economic booster.

National Context

In the face of public opposition to data centers, multiple states are attempting to enact bans. A moratorium was recently passed by Maine's state legislature but was vetoed by Democrat governor Janet Mills. Other states with legislation advancing include:

• Washington
• Wisconsin
• Illinois
• Pennsylvania
• New Hampshire
• Connecticut
• South Carolina

Local bans have also been enacted in cities like Seattle.

Governor's Position

Hochul, a pro-business moderate, initially said that data center bans should be left to cities and communities. Ahead of local elections, however, she decided to follow through on the moratorium.

"As data center development threatens to hike up utility bills, deplete our natural resources and create uncertainty for New Yorkers, it's my responsibility to take action and lead," she said.