The New York State Environmental Protection Agency should not issue permits for new data centers of 50 megawatts or more for a maximum of one year. Governor Kathy Hochul from the Democratic Party orders this. With its moratorium, it anticipates a stricter law that has been passed by parliament and will be submitted to Hochul for his signature.
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Projects that have already been approved are not affected by Decree Number 62. The period of the moratorium should be used to develop framework conditions, above all an environmental impact profile (Generic Environmental Impact Statement). In the future, this should be included with every application for approval of a large data center and provide information about the potential impacts of construction and operation: energy consumption, water consumption, impacts on water and air, disproportionate impacts on already disadvantaged settlements and noise.
This is intended to ensure uniform approval standards. The moratorium will end once the preparation of the environmental impact assessment is completed or in one year, whichever comes first. Large data centers are noisy, require a lot of cooling water and large amounts of electricity. This leads to more emissions and higher electricity prices for everyone.
Renewable energy and benefits for communities
In addition, Hochul would like to support municipalities in their negotiations with potential data center operators. A draft guide called the Community Investment Framework is under review. The aim is for the operators to support the respective municipality, for example through investments in infrastructure, kindergartens or direct cash payments. In addition, trade unions should be involved in order to be able to negotiate minimum wages and company agreements for the construction work. This could include requirements such as employing local workers, training or taking on apprentices.
Under the slogan Energize NY, regulations are already being prepared that will force large data centers to produce their own electricity or pay higher electricity prices. This is intended to prevent further price increases for the general public. Hochul is now ordering that the responsible ministry consider whether large data centers should also be required to invest in the public power grid infrastructure and/or to develop their own renewable energy sources for their own electricity needs.
Stricter law
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At the beginning of June, the Parliament passed a law (2025-A11560) that imposes stricter requirements than Hochul’s decree. According to the law, the one-year moratorium should take effect from 20 megawatts. After the moratorium ends, a public hearing would be mandatory in the approval process.
The Environmental Protection Agency should survey the impacts on water, electricity, land use, tax revenues and incentives, pollution and other adverse impacts. The responsible regulatory authority should impose separate, higher tariffs for water and electricity consumption by large data centers so that they bear their full share of the costs of the electricity network and water infrastructure.
There are also mandatory standards for energy efficiency and the use of renewable energy. There are also requirements for financing local infrastructure and the renovation of homes in the respective municipality.
Hochul’s more lenient decree suggests she will veto the bill. Data centers are exempt from general sales tax in New York. The governor calls on Parliament to abolish this tax exemption.
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