New York becomes first US state to impose moratorium on large data centres
The measure, expected to last approximately one year, places New York at odds with federal energy directives and halts approvals for more than a dozen projects in the pipeline.
New York has become the first US state to implement a statewide moratorium on the construction of large data centres, following an executive order signed by Governor Kathy Hochul on 14 July 2026. The order temporarily halts the approval of new permits for facilities consuming 50 megawatts or more of electricity, a move designed to protect local electricity supplies, water resources, and zoning controls from the rapid expansion of AI-driven infrastructure.
The pause applies to the state’s Department of Environmental Conservation and will remain in effect until the state finalises a new environmental review process, a timeline Hochul estimates will take approximately one year. While the order does not affect projects that have already secured permits or are deep in the pipeline, it potentially impacts more than a dozen projects currently awaiting approval. Hochul emphasised that the state would not exempt these facilities from local zoning laws, stating that progress should not arrive at the expense of higher utility bills or depleted water supplies.
Beyond the immediate halt on construction, Hochul’s office is considering regulatory measures to shift the financial burden of this infrastructure. The governor has proposed eliminating tax incentives for data centres and is considering requiring operators to pay into a fund to support the state’s electrical grid. These proposals arrive as public sentiment regarding the technology has soured; a recent Pew Research report indicated that only 10% of Americans were more excited than concerned about AI use in daily life, with significant portions of the public expressing worry over rising electricity prices and environmental impacts.
The executive order coincides with more stringent legislative efforts within New York. Lawmakers are currently considering separate bills, including one that would impose a one-year pause on data centres larger than 20 megawatts and another proposing a three-year moratorium. The scale of these facilities is expected to grow significantly, with BloombergNEF projecting that nearly a quarter of new data centres built through 2030 will exceed 500 megawatts, driven by increasing artificial intelligence investment.
The state’s intervention creates potential tension with federal energy policy. The Federal Energy Regulatory Commission, led by a Trump appointee, recently directed grid operators to create fast lanes for data centre interconnections to accelerate development. While New York moves to restrict new large-scale projects, other states have seen similar measures fail or remain unimplemented, such as a vetoed pause bill in Maine, marking New York as the first jurisdiction to enforce such a comprehensive restriction.
