New York imposes first-in-the-nation statewide freeze on 'hyperscale' data centers

New York imposes first-in-the-nation statewide freeze on 'hyperscale' data centers.

New York Gov. Kathy Hochul (D) is imposing the nation's first-ever statewide freeze on new "hyperscale" data centers. Hochul is pausing state-level environmental permits for "up to" a year to give the state time to put together a framework to protect the environment, the energy grid and New Yorkers' electric bills, her office said. Hochul aides told reporters that the pause would apply to data centers that can use 50 megawatts or more of power.

"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," the governor said in a written statement. "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," she added.

According to the International Energy Agency (IEA), data centers can vary in terms of their size and power use. The IEA says that "conventional" data centers can use between 10 and 25 megawatts while "a hyperscale, AI-focused" data center can use 100 megawatts or more.

Hochul's announcement comes after the New York state legislature passed its own one-year moratorium last month. The bill would block data center permits for "hyperscale" facilities, which it defines as those with a peak load of more than 20 megawatts.

In response, several municipalities have frozen new data center construction locally, but no state has done so. Maine's legislature recently passed a moratorium, but Gov. Janet Mills (D) vetoed it because it did not include a carveout for a project that was already underway. Several progressive lawmakers at the federal level, including Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.), have embraced the push for a moratorium and are calling for a nationwide halt to data center construction.

The Data Center Coalition, an industry trade group backed by several major tech companies, argued Tuesday that New York's moratorium "overlooks the role of data centers in attracting robust supply chain investments and jobs" and will "undermine New York's economy and send a signal that the state is closed for business." "As hundreds of billions of dollars are being deployed to build out the nation's digital infrastructure, Gov. Hochul's statewide moratorium on data centers will ensure that those investments, jobs, and economic activity flow elsewhere rather than to New York -- with impacts far beyond the data center industry," Dan Diorio, the group's executive vice president of state policy and government affairs, said in a statement.