N.Y. Gov. Kathy Hochul signs data center moratorium executive order
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New York Gov. Kathy Hochul (D) on Tuesday will sign a data center moratorium executive order, delaying new construction for up to one year.
Why it matters: New York is becoming the first state to impose a statewide data center moratorium as backlash against the industry escalates.
Driving the news: The order immediately pauses environmental permits for projects at the 50 megawatt level or more for up to one year while a regulatory framework is developed.
- That framework includes a "Generic Environmental Impact Statement" to create consistent standards for companies, according to a press release.
- The impact statement will assess data center energy demand, water use and quality, and air quality, the release states.
- The order will also provide, within 60 days, guidance for local entities to negotiate community benefits with companies, such as infrastructure improvement, child care investments or direct financial support.
Local hiring, apprenticeships and prevailing wage standards are prioritized in the order.
- It also directs the Department of Public Service to consider creating a New York Grid Acceleration Fund to require data centers to invest in the state's aging grid infrastructure.
- Hochul will also pursue legislation to repeal sales tax exemptions for data centers across the state.
Zoom in: New York is seeing a massive surge in data center energy demand, including a $19.4 billion facility sparking community concerns in Genesee County.
- Asked whether that project would be impacted, a Hochul staffer said: "To the extent there are projects that still need [Department of Environmental Conservation] discretionary permits, we do expect this to impact them."
Zoom out: Data center moratorium bills and executive action are picking up steam across the country.
- Last month, Arizona Gov. Katie Hobbs (D) signed a bill that imposes a three-year moratorium on new sales tax breaks for data centers.
What's next: The New York legislature in June passed The Responsible Data Center Development Act, which has not been signed by Hochul.
- "Frankly, the bill is complicated," a Hochul staffer said during a press call. "It's going to take some time to work through it with the legislature, and this felt like the fastest way to be able to act now."
- The moratorium laid out in the bill would impact projects above the 20 megawatt level, create new electric and water rate classes for them and require a public hearing prior to approval of any future permits.
- A Hochul staffer said they would work with the legislature later this year.
