U.S. President Joe Biden (2nd District, left), Senate Majority Leader Chuck Schumer, and New York Governor look at a 3D rendering of a future Micron factory presented by Micron Technology CEO Sanjay Mehrotra (left) during a tour of the Micron Pavilion at the SRC Arena Event Center at Onondaga Community College in Syracuse, New York, on October 27, 2022.
Mandel Gunn | AFP | Getty Images
New York Gov. Cathy Hochul signed an executive order Tuesday banning the construction of new large data centers using more than 50 megawatts of electricity for up to one year, making the Empire State the first state in the nation to impose such a ban.
The governor announced New York City’s executive order, saying, “We are now in the midst of the most significant economic upheaval in generations, perhaps ever.” “These hyperscale AI data centers will consume enormous amounts of power, threatening to exceed the capacity of our power grid,” she added. “They are driving up costs for local ratepayers, and I refuse to see those costs passed on to New Yorkers.”
Hochul’s sentiments echo those of many state residents and environmental leaders who have come under scrutiny for hyperscaler data centers for their excessive consumption of electricity and natural resources, especially fresh water.
The announcement noted that New Yorkers’ electricity bills are rising, with the average residential electricity bill in the state increasing by nearly 68 percent since 2019. This fact has strongly skewed public opinion against new data center construction, leading to significant public opposition to facilities planned in townships such as Lansing and East Fishkill.
Leaders of data center opponents praised the governor’s decision.
“This one-year moratorium is a huge step forward for New York communities as they battle the onslaught of large data center plans,” said Laura Shindel, director of New York State Food & Water Watch, a prominent environmental nonprofit. “This is a direct result of the tremendous public pressure that people across our state are calling on our elected leaders to protect us from Big Tech’s attacks that threaten our state’s clean air and water and the economic security of New Yorkers.”
But praise was not limited to environmental and community leaders; it also came from the governor’s allies in both Congress and the state Legislature.
“This one-year grace period is fundamentally about trust,” Sen. Kirsten Gillibrand said in a statement provided to WRGB Albany. “Right now, New Yorkers don’t believe these massive facilities are benefiting them. Before we move forward, our communities need ironclad guarantees that our utility bills won’t go up, our water will be protected, and our air will stay clean.”
“Technology should improve our lives, not pollute our water, strain our energy grid, or raise our utility bills,” Democratic state Sen. Kristen Gonzalez said in a statement from New York. “By giving countries time to plan, we can ensure that development and innovation do not come at the expense of all of us.”
But many voiced dissatisfaction, arguing that the moratorium would hinder New York, and the United States,’s ability to compete in the rapidly expanding technology sector.
“A statewide moratorium is the wrong answer to the right question,” Republican New York state Rep. Scott Gray and three colleagues wrote in a letter to the governor in June opposing the data center moratorium. “Freezing investments, taking decisions away from the communities that should be making them, and duplicating or ignoring the work the governor’s own administration is already doing.”
“Site belongs to the local community. Albany’s job is to set the regulatory framework, facilitate interconnectivity, and protect ratepayers and grid reliability,” Gray et al. wrote. “It’s not Albany’s job to decide if a town or village wants one of these projects. That’s a local decision and it should remain a project.”
“China has won,” Pennsylvania Sen. John Fetterman said on the X-Post Tuesday morning.
Data center builders claim that foreign rivals are supporting anti-AI movements, and there is evidence that anti-AI content produced by foreign countries is being published for the United States.
Data center suspensions remain popular in the state. A Siena Institute poll conducted in June found that 46% of respondents thought a one-year moratorium on new licenses for large data centers in New York would be good for the state, while just 21% said it would be bad. The issue appears to be fairly bipartisan, with Democrats supporting it by a 37-point margin and Republicans supporting it by a 13-point margin. That same poll showed Hochul, a Democrat, leading his Republican challenger, Nassau County Executive Bruce Blakeman, by a 20-point margin, a positive sign for re-election.
The nation’s first statewide moratorium marks a significant show of authority for Mr. Hochul, who has implemented a breakthrough policy that Democratic colleagues like Janet Mills of Maine and Abigail Spanberger of Virginia have warned about. Fourteen state legislatures have introduced bills to restrict new data center construction, but none have been signed into law so far.
Tuesday’s suspension may not be the last action taken by the governor’s office. The Responsible Data Center Development Act, passed by the state Legislature earlier this year, includes a one-year moratorium on construction of new data centers with peak energy needs of 20 megawatts or more. Hochul has not yet taken action on the bill, but said he would work with Congress to “further consider” the nature of the bill. Additionally, a statement released by Hochul’s office said the governor is “actively pursuing legislation that would eliminate the sales tax exemption for large data centers across the state.”
In addition to the moratorium on new data center construction, Hochul directed the New York City Department of Public Services to “consider an approach that would require data centers to fund new clean power generation dedicated to data center operations, including but not limited to customer-installed distributed energy resources and battery storage.”
Hochul said the moratorium will be lifted if the state develops a comprehensive framework and strong construction standards to support local governments. New York was ranked as one of the most favorable states to land an AI data center in CNBC’s recent Top States for Business rankings.
