The order pauses state approvals for many new or expanded facilities while agencies study the effects on electricity costs, water supplies, and local communities.
New York Gov. Kathy Hochul signed an executive order Wednesday establishing what the state calls a temporary moratorium on many large data centers while regulators review the industry’s growing demands on the electric grid and water infrastructure.
New York ordered state regulators to stop processing permit applications for many large data centers while officials study how the facilities could affect electricity prices, water supplies, and local communities.
The order comes as New York faces a surge in demand for computing power, driven in part by AI. State officials say companies proposed enough new data centers to consume nearly 12 gigawatts of electricity, enough to power millions of homes. Those projects are currently waiting for approval to connect to the grid, a process overseen by the New York Independent System Operator. More than eight gigawatts of proposed capacity entered the queue in 2025 alone.
The executive order says New York’s existing rules may not be equipped to handle the rapid growth of large data centers. It warns that new projects could raise electricity costs, require expensive grid upgrades, consume large amounts of water, and leave utilities paying for infrastructure that is never fully used.
The moratorium does not apply to every facility.
Under the executive order, a covered data center is generally defined as a facility that operates continuously, provides services such as cloud computing or data storage, and consumes or can consume at least 50 megawatts of electricity. The order excludes facilities used primarily for manufacturing, many research activities, accredited colleges and universities, and medical care.
The permit pause will remain in place until the Department of Public Service completes a statewide environmental review and submits its findings. During that process, the Department of Environmental Conservation may require companies seeking permits for large developments to disclose whether their projects include a data center.
The executive order also directs state agencies to examine whether New York needs new rules governing how large data centers connect to the grid, use water, and contribute to local communities.
Within 60 days, Empire State Development must propose ways in which large data centers can support the communities that host them. The agency will examine whether companies should help pay for local infrastructure projects and provide more information about the economic benefits their facilities create.
Within 90 days, the Department of Public Service must examine how New York determines whether the electric grid can support large new customers such as data centers. The review could lead to changes in how projects connect to the state’s power system.
The reviews will shape whether New York adopts new rules governing how large data centers connect to the grid, use water, and negotiate with host communities. For now, state agencies will stop processing many new data center approvals while those reviews are underway.
