New York Construction News Report 

New York Gov. Kathy Hochul has signed an executive order creating what her office says is the nation’s first moratorium on new hyperscale data centre development, temporarily halting certain state environmental permits while officials develop new regulations for the industry.

The one-year pause is intended to establish new standards for large-scale data centres that require significant amounts of electricity and water to operate and cool thousands of computer servers.

“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,” Hochul said at a news conference. “And I refuse to let those costs be passed on to New Yorkers who already pay too much for their utility bills.

Under the order, the New York Department of Public Service (DPS) will develop a Generic Environmental Impact Statement (GEIS) examining the potential impacts of data centre construction and operation, including energy demand, water use and quality, and air quality.

“These data centers require millions of gallons of water, straining the local supplies and when powered by fossil fuels, they drive up our carbon footprint,” Hochul said. “They occupy massive amounts of land, potentially displacing agricultural space and open spaces and if you live near one, they emit vibrations and noise ranging from annoying to sound that is so loud it is deafening and disruptive to neighborhoods.

“The bottom line is progress shouldn’t arrive with a higher utility bill, depleted water supply or noise pollution.”

During the review period, the state Department of Environmental Conservation (DEC) will not issue discretionary permits for new data centre projects unless those applications have already been deemed complete.

The moratorium will be lifted once new standards are finalized, allowing projects to proceed if they meet state requirements, local zoning rules and other approvals.

Her announcement follows Hochul’s direction earlier this year for DPS to begin the Energize NY proceeding, which is examining ways to ensure data centres either pay more for the electricity they use or provide their own energy supply.

Officials said the goal is to prevent large new electricity demands from increasing costs for residential and commercial ratepayers.

The governor has also directed Empire State Development (ESD) to create a Community Investment Framework within 60 days to help municipalities negotiate benefits from future data centre developments.

The framework will provide guidance on agreements involving local infrastructure improvements, childcare investments and direct financial contributions to communities. It will also encourage labour participation through prevailing wage standards, project labour agreements, local hiring, apprenticeships and workforce development programs.

In addition, DPS will consider creating a New York Grid Acceleration Fund that could require data centre developers to contribute to upgrades of the state’s electricity infrastructure.

The fund could support new clean energy generation, battery storage projects and protections against speculative electricity demands that could increase costs or create uncertainty for the grid.

Hochul is also seeking legislation to remove sales tax exemptions currently available to large data centre projects.

The announcement comes as New York continues to expand its artificial intellige

nce sector. Hochul previously launched Empire AI, an initiative aimed at advancing AI research, and created the FutureWorks Commission to examine the impacts of AI on workers, businesses and the economy.

“New York will lead the way in creating the strongest standards in the nation for data centre development, ensuring that when companies succeed because of New York, New Yorkers succeed too,” Hochul said.

 

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Source: New York Construction Report