New York pauses hyperscale data centre permits

New York City skyline (Image: Adobe Stock)

New York Governor Kathy Hochul has signed an executive order pausing state environmental permits for new projects for up to one year.

The order applies to proposed hyperscale data centres with electrical capacity of more than 50MW that have not yet received the required approvals from the New York State Department of Environmental Conservation.

The pause will remain in place while state regulators develop a generic environmental impact statement for data centres.

The state said the assessment would consider the environmental impacts of building and operating data centres, including energy demand, water use and quality, and air quality.

Hochul said, “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.”

New York said data centre demand had grown rapidly as a result of artificial intelligence and other computing operations.

The governor’s office said the order was intended to protect ratepayers, the environment, the energy grid and communities while the state develops standards for future data centre development.

The order also directs the Department of Public Service to consider measures requiring data centres to contribute to grid infrastructure and energy needs.

Once the standards are finalised, the state said the moratorium would be lifted and new data centre projects would be able to proceed if they comply with state, zoning and other local approvals.

 Construction organisations have criticised the move.

Carlo Scissura, president and chief executive officer of the New York Building Congress, said, “This data center moratorium will damage our state’s economy, its workforce, and our competitive standing in the industries of tomorrow.

“A blanket moratorium is the wrong tool for a real-world problem that demands careful consideration.”

He added that no one disputed the need for guardrails as data centre development accelerates, but said a moratorium risked causing New York to lose out on grid investment.

The move comes as demand for data centre construction continues to grow across the US, driven by AI, cloud computing and digital infrastructure investment.