New York Governor Kathy Hochul has signed the country’s first-ever executive order imposing a statewide moratorium on new large-scale data centers for up to one year. The order freezes the permitting process for new data centers requiring 50 megawatts or more of electricity, placing the fastest-growing source of U.S. power demand on hold while state regulators assess its long-term impact on New York’s electric grid, water resources and surrounding communities.
The New York Department of Environmental Conservation will use the pause to conduct a Generic Environmental Impact Statement (GEIS) study and establish uniform, statewide regulatory frameworks addressing energy grid demands, local water consumption and air quality. Smaller computing facilities used by hospitals, universities and back-office financial services are exempt from the executive order.
The moratorium comes hot on the heels of the New York State Legislature passing its own one-year pause in June 2026 under the Responsible Data Center Development Act, which targeted facilities over 20 MW. However, utilizing an executive order allows Hochul’s administration to issue an immediate freeze while continuing to review and refine the legislature’s broader statutory proposals.
Governor Hochul also announced she is pursuing legislation to repeal sales tax exemptions for hyperscale data centers. Her administration is moving forward with rules requiring operators to either build their own dedicated on-site power generation or pay heavy premiums to prevent increased utility costs from being passed on to standard residential consumers.
New York is the latest on a burgeoning list of states facing growing backlash against power-hungry data centers. A broad, bipartisan backlash against massive AI infrastructure is sweeping across the U.S., with states introducing moratoriums, new electricity taxes, and rural zoning bans as communities push back against grid strain and high utility bills.
As the world’s data center capital, Virginia, in particular, has been experiencing massive internal political division over the industry. The state’s legislature has approved a biennial budget imposing an $0.011 per kWh consumption tax, and passed legislation requiring data centers to pay for transmission infrastructure and limiting the use of noisy backup generators. Blackstone-owned QTS Realty Trust recently withdrew its final appeal to the Virginia Supreme Court to build a giant data center in the state, with the $100 billion, 2,100-acre Prince William Digital Gateway now officially dead.
In Texas, Governor Greg Abbott has urged regulators to ensure data centers do not shift energy costs to local residents and called for development bans in rural areas. Meanwhile, multiple rural counties across the state have enacted local moratoriums.
By Alex Kimani for Oilprice.com
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