New York Governor Signs One-Year Moratorium on New Hyperscale Data Centers

New York Gov. Kathy Hochul signed an executive order July 14 imposing a one-year moratorium on new permits for hyperscale data centers, the first such statewide action in the United States. The order applies to facilities with power demands of 50 megawatts or more.

It pauses permitting for up to one year but leaves untouched any data centers that already hold valid permits. Hochul said the step will give the state time to develop rules addressing effects on the energy grid, natural resources and local communities.

"These hyperscale AI data centers consume enormous amounts of power, truly threatening to outpace our grid's capacity, and they drive up costs for local ratepayers," she said at a press conference.

The governor added that New York will require data centers to either produce their own power or pay a premium to use the state's electric grid. She also said she aims to repeal sales tax exemptions for large-scale data centers. The executive order is narrower than the Responsible Data Center Development Act passed by the state Legislature last month, which set a 20-megawatt threshold.

The governor's office said it will continue working with lawmakers and further review that bill. Shares of Digital Realty Trust, Vertiv Holdings and Equinix fell as much as 2 percent on the day of the announcement. A Siena University poll conducted in June found that roughly half of New York voters viewed a one-year moratorium favorably, while 21 percent opposed it and 17 percent were undecided.

Sen. John Fetterman posted "China wins" on X in response. Sen. Bernie Sanders wrote that his own federal moratorium bill "was called a radical idea" months earlier and noted that New York had become the first state to enact one.

State Sen.