Governor Kathy Hochul signed an executive order pausing state environmental permits for up to one year to build a nation-leading regulatory framework aimed at protecting ratepayers, the environment, the energy grid and communities across the state.
“New York has always been at the forefront of innovation and change but we’ve also always guaranteed that New Yorkers benefit. 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,” Governor Hochul said.
No one has ever accused New York of fearing innovation.
I want New York to be the first to harness the power of AI the right way.
If you’re going to succeed because of New York, New Yorkers should share in that success. pic.twitter.com/qM0QO3ORQh
— Governor Kathy Hochul (@GovKathyHochul) July 14, 2026
The move comes amid a surge in data center development driven by artificial intelligence and other computing operations. The surge has led to proposals across the state for hyperscale data centers requiring massive amounts of energy and water to power and cool thousands of computer servers.
Earlier this year, the governor directed the Department of Public Service (DPS) to begin the Energize NY proceeding, which would require data centers to either pay more for their energy or supply their own. Under the proposal, hyperscale data centers would be required to either generate their own electricity or pay a premium to access New York’s power grid, helping ensure residents and businesses continue to have affordable energy.
Under the same proceeding, DPS has also been directed to prepare a Generic Environmental Impact Statement (GEIS) for data centers, aimed at holding new facilities to consistent standards as they come online
During the development of this GEIS, which will take up to a year, a moratorium will be in place and the Department of Environmental Conservation (DEC) will not issue any discretionary permits not already deemed complete.
The GEIS will assess the environmental impacts of data center construction and operations, including energy demand, water use and quality, and air quality. Once the state finalizes these standards, the moratorium will be lifted, allowing new data center projects to proceed as long as they follow state, zoning codes and other local approvals.
The governor also directed Empire State Development (ESD) to issue a Community Investment Framework (CIF) within 60 days, which will provide clear guidance to local entities to help them negotiate community benefits as part of any large-scale data center deal, including local infrastructure improvements, child care investments and direct financial support for their community.
Hochul is also weighing a New York Grid Acceleration Fund, which would require data centers to help finance upgrades to the state’s aging grid. It could include an insurance pool to guard against costs from speculative, unbuilt projects.
Under the same proceeding, DPS has also been directed to prepare a Generic Environmental Impact Statement (GEIS) for data centers, aimed at holding new facilities to consistent standards as they come online.”
“New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too,” Governor Hochul said.
Governor Hochul is also pursuing legislation to repeal sales tax exemptions for massive data centers across the state.
The order also lays groundwork for a new Office of Digital Innovation, Governance, Integrity, and Trust (DIGIT), which will oversee frontier AI developers and require them to report critical safety incidents.
The announcement also highlighted Hochul’s broader AI agenda. New York has enacted several AI-related safeguards, including the SAFE for Kids Act, the Child Data Protection Act, AI Companion legislation, the Warning Labels bill and the AI Deceptive Practices Act. The state has also launched Empire AI to advance AI research for the public good and established the FutureWorks Commission to help prepare workers for the AI economy while supporting responsible AI innovation.
New York’s moratorium is one of the strongest actions any state has taken so far to control the rapid growth of AI data centers and the strain they cause on power, water, and other resources
