New York imposes landmark one-year ban on large data centres

New York State has become the first US state to impose a moratorium on the construction of large hyperscale data centres, responding to growing concerns about their environmental and economic impact. Governor Kathy Hochul announced the one-year pause on Tuesday, stating that the state would use the period to develop a regulatory framework addressing the challenges posed by data centre expansion.

The moratorium applies to large data centre projects defined as those consuming 50 megawatts of power or more. During the pause, the state will not issue new discretionary permits for such facilities. The governor emphasized that data centre development threatens to increase utility bills, deplete natural resources, and create uncertainty for residents, prompting the need for state action.

Beyond the construction pause, New York is shifting the financial burden of data centre operations from the general public to the facilities themselves. The state is requiring developers to pay higher rates for electricity consumption, contribute to upgrades of the state's power grid, provide their own power sources, and invest in clean energy to operate their facilities. The governor also indicated the state is considering repealing sales tax exemptions previously granted to data centres.

Data centre construction has emerged as a significant political issue across the United States, with moratoriums proposed in at least a dozen states including Vermont, Michigan, and Virginia. Public opposition appears substantial, with polling showing that only 14 percent of Americans would accept a data centre near their homes, while 71 percent oppose data centre construction in their communities. New York currently hosts 148 operational data centres, making it the state with the sixth-largest concentration.