New York Freezes Big Data Centre Permits for Up to a Year Over Energy and Cost Fears
Governor Kathy Hochul has signed the first statewide moratorium on large data centre construction in the US, pausing projects that would draw more than 50 megawatts of power while regulators write new rules.
Key points
- New York Governor Kathy Hochul signed a statewide moratorium on large data centre permits in June 2025, the first of its kind in the US.
- The pause blocks new environmental permits for data centres drawing more than 50 megawatts of electricity, enough to power tens of thousands of homes.
- The moratorium can last up to a year while state regulators write new rules on energy use, water consumption, and air quality.
- A separate bill passed by the state legislature, with a lower 20-megawatt threshold, still awaits Hochul's signature.
- Hochul also plans to push lawmakers to remove sales tax exemptions for large data centres when the legislature returns in 2026.
New York has put the brakes on big data centre construction. Governor Kathy Hochul has signed an executive order, a direct instruction from the governor that does not need a legislative vote, blocking new environmental permits for data centres that would consume more than 50 megawatts of power. That is a huge amount of electricity: a single megawatt can power roughly 750 to 1,000 average American homes.
The pause is the first statewide moratorium of its kind in the country, as first reported by The Verge.
The order gives the state's Department of Public Service, the agency that oversees utilities and energy regulation, up to a year to draft standards for assessing what new data centres would do to electricity bills, water supplies, and local air quality.
"As data centre 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," Hochul said in a statement.
For ordinary New Yorkers, the most immediate concern is the electricity bill. A cluster of giant data centres drawing power from the same grid pushes up demand, and that cost gets passed to households. The moratorium is designed to stop that spiral while rules catch up with the construction boom.
Hochul set the threshold at 50 megawatts, higher than the 20-megawatt limit the state legislature approved in a separate bill she has not yet signed. Her office said the higher bar is deliberate: smaller data centres used by hospitals and universities should not face disruption.
What does this mean for people living near a planned data centre?
Residents near a proposed site now have more time, and more leverage. Hochul has asked the state's economic development agency to build a framework that helps local communities negotiate direct benefits before any large data centre gets the green light. She also wants to explore requiring data centre operators to invest in the state's wider energy infrastructure as a condition of approval.
New York's move follows years of local frustration across the US. Communities from Virginia to Texas have pushed back against data centres that bring noise, heat, water demand, and rising energy costs without much local employment in return. Maine nearly became the first state to act, but its governor vetoed a moratorium bill in April 2025.
The AI boom is the engine behind all of this. Training and running large AI models requires enormous amounts of computing power, and that computing power lives in data centres. Demand is growing faster than grids were built to handle.
Hochul's executive action lets her put the pause in place now while she decides whether to sign the legislature's stricter bill.
