New York Freezes Big Data Centre Permits for Up to a Year Over Energy and Cost Fears

Key points

• New York Governor Kathy Hochul signed a statewide moratorium on large data centre permits in June 2025, the first of its kind in the US.
• The pause blocks new environmental permits for data centres drawing more than 50 megawatts of electricity.
• The moratorium can last up to a year while state regulators write new rules on energy use, water consumption, and air quality.
• A separate bill passed by the state legislature, with a lower 20-megawatt threshold, still awaits Hochul's signature.
• Hochul also plans to push lawmakers to remove sales tax exemptions for large data centres when the legislature returns in 2026.

New York has put the brakes on big data centre construction. Governor Kathy Hochul has signed an executive order, a direct instruction from the governor that does not need a legislative vote, blocking new environmental permits for data centres that would consume more than 50 megawatts of power. That's a substantial draw: for context, a single large hospital campus typically runs on a few megawatts.

The pause is the nation's first statewide moratorium of its kind, as first reported by The Verge.

Hochul's order gives the Department of Public Service, the agency overseeing utilities and energy regulation, up to a year to draft standards covering what new data centres would do to electricity bills, water supplies, and local air quality. We reported on 13 July 2026 how opposition to AI's power-hungry building boom has gone mainstream; this executive order is the most consequential government response yet.

"As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it's my responsibility to take action and lead," Hochul said in a statement.

For ordinary New Yorkers, the electricity bill is the sharpest worry. A cluster of giant data centres drawing power from the same grid pushes up demand, and households absorb that cost. The moratorium is designed to stop that spiral while rules catch up with the construction boom.

Hochul set the threshold at 50 megawatts, well above the 20-megawatt limit the state legislature approved in a separate bill she has not yet signed. Her office said the higher bar is deliberate: smaller data centres used by hospitals and universities should not face disruption. Her office could not immediately say how many proposals fall above the 50-megawatt line.

What does this mean for people living near a planned data centre?

Residents near a proposed site now have more time to organise. Hochul has asked the state's economic development agency to build a framework for local communities to negotiate direct benefits before any large data centre gets the green light. She also wants to explore requiring operators to invest in the state's wider energy infrastructure as a condition of approval.

Maine nearly moved first, but its governor vetoed a moratorium bill in April 2025. Communities from Virginia to Texas have long pushed back against facilities that bring noise, heat, rising energy costs, and little local employment. The AI boom is the engine behind all of this: training and running large AI models requires enormous computing power, and that computing power lives in data centres. Demand is growing faster than grids were built to handle.

The patient-centred question worth watching is whether hospitals and research institutions, already squeezed by energy costs, see any relief from this pause. As we reported, Microsoft, Amazon and Google collectively produced 119 million metric tonnes of carbon dioxide last year, the bulk of it tied to data centre expansion. A moratorium buys time. Whether regulators use it well is what matters.