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Governor’s Executive Order Applies to Data Centers Above 50 Megawatts and Exempts Manufacturing, Research, Education, Health Care
ANALYSIS
Governor Kathy Hochul today signed an Executive Order implementing a one-year, statewide moratorium on the construction of new large-scale data centers.
The order seeks to limit the impact of energy use on the environment, while giving state government time to establish consistent regulatory and community guidelines.
The moratorium targets data centers that provide data storage, cloud computing and/or content delivery to third parties that run on a continuous 24-hour cycle. The freeze applies to data centers that consume or can consume more than 50 megawatts of energy, while exempting those designed for manufacturing, research, education, or the provision of medical care.
The moratorium was prompted by the potential impacts on the use of resources such as energy and water, the impacts on water quality, air quality, noise, lighting, quality of life and other potential environmental impacts. However, the main driver for the moratorium was excessive energy and water demands and the uncertainty regarding the state’s ability to meet the demands of the data center industry.
“Data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers,” said Hochul. “It’s my responsibility to take action and lead. 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.”
The Executive Order temporarily halts the issuance of discretionary state environmental and construction permits for projects awaiting approval, while exempting facilities that already possess all necessary permits.
The order directs the Department of Public Service to develop standardized regulations and rate structures for data centers to protect utility customers from rising energy costs. It also aims to reduce strain on the power grid by exploring rules that would require new data centers to build their own clean power-generating and battery storage systems, or pay a premium for grid energy.
The moratorium provides Empire State Development with time to create a “community investment framework” to help local municipalities negotiate favorable agreements with developers, which could include union labor requirements and investments in local infrastructure. The framework is designed to help local governments get something in return for allowing the siting of data centers in their jurisdictions, including the establishment of community investment funds for data center developers and operators to provide capital that can be used for energy affordability efforts and enhancements to public services like child care, K-12 programming, and public infrastructure. Examples of infrastructure investments include local energy distribution centers, broadband, irrigation systems, or water treatment plants.
The Department of Public Services will also consider the development of a mechanism to protect utility customers by having data center developers make upfront capital contributions toward grid improvements, procuring clean energy supplies, and modernizing the grid, while ensuring “the costs of integrating and serving these new loads are not borne by ratepayers.”
A Data Center Interconnection Working Group will be formed to identify and resolve energy connectivity issues, and the DEC is charged with assessing the need for new regulations regarding water demands of large users, including data centers.
Separately, the governor is in discussions with state lawmakers to eliminate sales tax and other subsidies for data centers, a move that would require legislative action.
Last month, the New York Legislature approved a one-year data center construction pause which will likely be vetoed by the governor in light of today’s Executive Order. The New York State Legislature’s “Responsible Data Center Development Act,” would institute a one-year statewide moratorium on permits for new large-scale data centers with a peak energy demand of 20 Megawatts (MW) or more. The Governor’s Executive Order only impacts permitting on data centers capable of consuming 50 megawatts of power or more.
Locally, Orangetown is considering its own moratorium on new data centers and passed a resolution in June to hire a consultant to study the logistics of its implementation. Orangetown’s moratorium would not impact DataBank’s proposal to expand its existing data center on Corporate Drive in Orangeburg. DataBank’s data center does not reach the 50 megawatt threshold of the statewide moratorium.
“DataBank’s Phase 2 project — at 15 MW — is below the threshold set forth in the executive order signed by the governor,” said Databank’s attorney Lino Sciarretta. “Even with both phases, we are still under the 50 MW threshold. Accordingly the order does not apply to the project.”
However, the controversial DataBank application hit a speed bump last week after members of the Orangetown Planning Board voted unanimously to subject the project to a deeper environmental review. The board voted to give DataBank’s plans for a 77,862 data center expansion a “Positive SEQRA Declaration,” after months of public outcry against the project.
A Siena Poll conducted by the Siena Research Institute between June 17 – 23, 2026 asking if “a one-year moratorium on new permits for large data centers in New York” was good, bad, in the middle, or don’t know, found that 46 percent of New Yorkers felt a moratorium was good for New York, 21 percent thought it was bad for New York, and 33 percent either were undecided or didn’t know.
The statewide moratorium is designed to last up to a year while the state agencies finalize new regulations.
