New York has become the first U.S. state to impose a temporary moratorium on issuing new permits for large data processing centers after Governor Kathy Hochul signed an executive order. The order temporarily prohibits the approval of new data center projects with a capacity of 50 megawatts or more, potentially affecting more than a dozen projects. The state’s Department of Environmental Protection will not issue permits for which the review has not yet been completed.
The decision stems from concerns about resource usage and broader discussions surrounding artificial intelligence (AI). A recent report by Pew Research indicated that only 10% of Americans are more excited than concerned about AI in everyday life, and just 23% believe the technology will positively impact their work. Less than a quarter of the population expects AI to contribute to economic growth, and fewer than a third are confident that the government will regulate this technology responsibly.
Statements by the Governor and Conditions of the Moratorium
“Progress should not come at the expense of higher utility bills, depletion of water resources, or noise pollution,” said Hochul at a press conference in Brooklyn. She added that such centers “can and should only be built where local communities want them,” and “will never be exempt from local zoning requirements and obtaining local permits.”
The moratorium will be lifted after the completion of an environmental review of the data processing centers, which, according to Hochul, is expected to take about a year. Her office is also considering requiring data center operators to contribute to the state’s power grid support fund and to refrain from providing hyper-scale centers with tax incentives.
Legislative Initiatives and Industry Growth
Hochul’s executive order was issued amid discussions of stricter measures in the New York legislature. Last month, lawmakers approved a bill imposing a one-year moratorium on issuing permits for data processing centers with a capacity of more than 20 megawatts, while another bill, still in committee, proposes a three-year moratorium.
The average data center built in recent years had a capacity of less than 100 megawatts, but new projects are expected to be significantly larger due to the growing demands of AI for computing resources. According to BloombergNEF, by 2030, nearly a quarter of new data processing centers will exceed 500 megawatts.
National Context and Changing Public Opinion
The concept of a moratorium on large data centers has been discussed at both state and federal levels, but New York is the first state to implement it. In December, over 230 organizations called for a nationwide pause on the construction of new data processing centers. Senator Bernie Sanders of Vermont also proposed a nationwide moratorium, but this initiative did not gain significant traction. Recently, the legislature of Maine passed a bill to suspend the issuance of permits for new data centers until November 1, 2027, but Governor Janet Mills vetoed it.
Just a few years ago, states actively sought to attract data center operators for new investments, but public opinion has shifted due to the scale of new projects. These projects increasingly strain the power grid and local resources, including water and agricultural land. A recent survey found that two-thirds of respondents are concerned about the impact of data centers on rising electricity prices. Another survey revealed that people would prefer an Amazon warehouse near their home rather than a new data center.
Hochul’s order could lead to a conflict with the Trump administration, which supports the development of data processing centers. Last month, the Federal Energy Regulatory Commission (FERC), led by a Trump appointee, directed power grid operators to develop expedited connection procedures for data processing centers.
Source: Wire News
