(Bloomberg Government) -- New York will be the first state to issue a moratorium on new hyperscale data centers as localities across the country grapple with how to regulate the proliferation of energy-hungry facilities.
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Gov. Kathy Hochul (D) on Tuesday will announce a for up to one year on state environmental permits for building more data centers, which require copious amounts of energy, water, and land for their infrastructure. The executive order applies to large data centers that use 50 megawatts or more of power — enough to provide electricity for roughly 9,000 and 40,000 homes.
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Hochul's action comes as states and the federal government are trying to remain competitive on artificial intelligence and generate jobs for communities, while also ensuring data centers don't drain natural resources, the energy grid, or consumers' wallets.
The governor's move is designed to give New York State more time to put in place a regulatory framework for data center construction and figure out how big facilities will affect the environment and utility costs for ratepayers, according to a press briefing from members of the governor's office. The is not intended to disrupt data center operations that benefit, for example, hospitals, education, or research, the aides said.
The New York State legislature in June passed legislation that would impose a one-year moratorium on certain permits for large data centers, among other provisions. Implementing the Responsible Data Center Development Act will take time, and the governor felt she needed to take immediate urgent action because of New Yorkers' concerns, a Hochul aide told reporters.
Sen. Ed Markey (D-Mass.) on Monday released a discussion draft that would create a national blueprint to prevent increased energy costs, pollution, and adverse effects on health related to data center buildout.
Hochul's executive order directs the state's Department of Public Service to conduct a generic environmental impact statement on the effects of new data centers on energy, water, and air quality. The governor also wants DPS to look at creating a state grid acceleration fund to require data centers to invest in New York's grid infrastructure.