**New York Implements One-Year Moratorium on Large Data Centres**
*Published on July 14, 2026*
In a groundbreaking move, New York State has enacted a one-year moratorium on the construction of large hyperscale data centres, becoming the first state in the United States to impose such a ban. Governor Kathy Hochul announced the decision on Tuesday, citing concerns over rising utility costs and the potential negative impact on local water supplies as primary motivations for the temporary halt.
The moratorium targets data centres that utilize 50 megawatts of power or more, effectively pausing new discretionary permits for these large-scale projects. This action is part of a broader effort by the state to establish a regulatory framework that addresses the challenges posed by data centre development. Hochul emphasized the need for responsible management of natural resources and the importance of protecting New Yorkers from escalating utility bills.
“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 stated in a press release announcing the ban.
During the moratorium, New York will assess the electricity demand associated with data centres and evaluate their impact on local communities. The state has also shifted the financial burden of data centre operations onto the centres themselves, requiring developers to pay higher rates for electricity, contribute to power grid upgrades, and invest in clean energy solutions to power their facilities. Additionally, Hochul indicated that the state is considering repealing sales tax exemptions currently granted to data centres.
The decision to impose a moratorium reflects a growing trend of opposition to data centre construction across the United States, particularly as the issue gains traction in the political arena ahead of the upcoming midterm elections. New York currently hosts 148 operational data centres, ranking sixth in the nation for their concentration.
Progressive lawmakers in the state legislature have increasingly called for a halt to data centre construction, with State Senator Kristen Gonzalez recently introducing a bill advocating for a similar pause. This growing political momentum comes as Hochul prepares for her re-election campaign in November, where she leads her Republican opponent, Bruce Blakeman, by a significant margin in recent polling.
Public sentiment appears to align with the governor’s decision, as a June Reuters/Ipsos poll revealed that only 14 percent of Americans would be comfortable with a data centre being built near their homes. A Gallup poll conducted in May found that 71 percent of Americans oppose data centre construction in their local communities, with 48 percent expressing strong opposition.
The issue of data centre construction has become a focal point in various states, with moratoriums proposed in at least a dozen, including Vermont, Michigan, and Virginia. While Maine's legislature passed a measure to impose a similar ban, Governor Janet Mills vetoed it in April.
Concerns regarding data centres extend beyond environmental impacts, as health implications and social disparities have also been highlighted. A recent analysis by Reuters pointed to the installation of natural gas turbines in Elon Musk’s xAI Colossus 2 data centre project in Tennessee, which reportedly proceeded without securing necessary clean air permits. This project is expected to disproportionately affect nearby predominantly Black communities, which already experience higher rates of respiratory diseases.
A 2024 study from the University of California-Riverside projects that data centres could contribute to 600,000 asthma-related symptom cases by the end of the decade, underscoring the potential public health crisis associated with their proliferation.
As New York moves forward with its moratorium, the implications of this decision may resonate beyond its borders, potentially influencing similar actions in other states grappling with the challenges posed by the rapid expansion of data centres. The outcome of this year-long pause will likely shape the future landscape of data centre development and its regulatory environment in the United States.