New York enacts one-year data center moratorium for projects over 50 megawatts; first US state ban

New York Governor Kathy Hochul signed Senate Bill S10642 on July 14, enacting the Responsible Data Center Development Act—the first statewide moratorium on data center construction in the U.S. The one-year ban applies to projects with capacity of 50 megawatts or larger. The New York Department of Environmental Conservation will issue no new permits for uncompleted projects. Hochul cited concerns about rising utility bills, resource depletion, and uncertainty for residents, and vowed to pursue legislation repealing tax exemptions for large data centers.

The underlying tension: federally, the White House AI Action Plan pushes AI infrastructure development, but state and local jurisdictions are pushing back. More than 75 projects have been delayed in the first half of 2026, totaling $130 billion in frozen capex. Virginia counties have declared power emergencies; Monitoring Analytics attributes a 76% price surge in the nation's largest power grid to data center demand. Maine's legislature passed a similar moratorium, but Governor Janet Mills vetoed it to protect a locally supported project.

New York's move breaks the tie. The state will spend the moratorium year building a Generic Environmental Impact Statement (GEIS) to establish consistent future standards for data center development, assessing environmental impacts on construction, operation, water consumption, and air and noise pollution. Hochul's office indicated the ban lifts once the GEIS finalizes. Seventy percent of Americans oppose having a data center near their home, per polling cited in Tom's Hardware's coverage.

For infrastructure teams planning large-scale compute deployments: New York is now closed through mid-2027 at minimum. Teams are redirecting capacity to Texas, Oregon, and out-of-state sites while investing in small modular reactors (SMRs) and efficiency gains (Microsoft, NVIDIA working on power/water reductions). The regulatory fragmentation suggests long-term US data center planning must factor state-level power and environmental governance—no national unified policy yet.