New York imposes one-year moratorium on large data center construction

Fifteen states have weighed moratoriums. An advancing bill in one key state may show how the crackdown spreads.

50MW+ data centers in New York State affected by a new one-year moratorium as the state assesses the damages.

New York just became the first state to enact a one-year ban on large new data centers while the state government scrambles to develop regulations addressing challenges like energy demand and water use. “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 Kathy Hochul said when she announced the executive order, which applies to data centers 50 megawatts (MW) and larger. Hochul also said that she wants to repeal tax exemptions for large data centers. New York is far from alone: Across the U.S., states and cities are taking a range of steps—from ratepayer protection laws to zoning restrictions, moratoriums, and permanent bans—as opposition to data centers grows. Here’s a snapshot: Arizona Under a new ratepayer protection law, state regulators will create rules so data center grid costs won’t be passed to other customers. The state also passed a three-year pause on data center applications for sales tax exemptions. Tucson is working on a new zoning restriction for large data centers. California While many cities and counties across the country have paused data center development, the L.A.-area city of Monterey Park was the first to permanently ban new construction. No statewide moratorium is under consideration yet. Florida A new state law requires data centers to pay their full cost of service and stops utilities from passing data center costs to other customers. Sarasota County has a moratorium in place to stop new large data centers. Georgia Though a statewide moratorium failed this year, 11 counties have moratoriums in place on data center construction. Illinois A state bill would make data centers cover their own costs and boost clean energy use while limiting water consumption. Two counties and two municipalities have moratoriums in place. Iowa Five counties have enacted moratoriums on data center construction. Linn County created strict new zoning rules, including 1,000-foot residential setbacks and detailed water studies. Indiana Seven counties have moratoriums in place. Indianapolis’s city council just voted to recommend a moratorium on approving new data centers, and another city is poised to vote on a moratorium. Maine A statewide data center moratorium passed the legislature, but was vetoed by the governor. Another new law excludes data centers from state tax incentives. Six cities have moratoriums. Maryland Four counties have moratoriums in place, along with the city of Baltimore, which is pausing construction for a year while it works on an impact study. Michigan Twenty-seven towns and cities and 12 counties have moratoriums on new data centers, ranging from months to a year. A bipartisan statewide bill is moving through the legislature, but the governor has said she won’t sign it. Minnesota Minneapolis, along with two other cities, has a moratorium in place on large data center development. A state law restricts data centers to industrial districts. A statewide moratorium was proposed but didn’t pass. New Jersey A new law requires regulators to create a new electric rate for large data centers, make data centers pay for electric upgrades, and require operators to reduce or shift energy use when demand is high. Three counties have banned data centers. New York Before Hochul’s executive order, the state legislature passed a bill that that would impose a one-year moratorium on new data centers of 20 MW or larger—a broader threshold than the executive order. Hochul hasn’t yet signed or vetoed the bill. Two towns have moratoriums in place. Oklahoma A new state law requires large utility customers to cover their cost of service. Both Oklahoma City and Tulsa have moratoriums in place, though a preapproved Meta project in Tulsa was allowed to move forward. A state moratorium stalled. Virginia The town of Warrenton, where Amazon had proposed a 220,000-square-foot data center, enacted a permanent ban on data centers. Two other counties enacted new zoning restrictions. In 2025, state regulators created a new utility rate tier for large users like data centers, requiring them to sign contracts to cover their majority of their costs on the electric grid. The legislature is considering a statewide moratorium. Washington A new state law requires data centers to meet the same strict clean energy requirements as utilities. A bill with more regulations, opposed by Microsoft and other tech companies in the state, failed. In Seattle, the city council temporarily froze new siting for large data centers that require uninterruptible power, giving the city time to conduct impact studies. Spokane also has a moratorium in place. Wisconsin The state legislature considered, but did not pass, a ratepayer protection bill and a moratorium. Five local governments have moratoriums in place; the town of Port Washington, near Milwaukee, was the first in the country to pass an outright ban through a referendum. Approval problems Several other states have local moratoriums in place, from Missouri to North Carolina. (This map tracks the changes across the country.) Others are moving in the other direction—New Hampshire, for example, passed a law stopping local governments from specifically restricting data centers versus other businesses. But even in places without new rules, data centers are struggling to get local approval. Data Center Watch, a group tracking opposition, reported that in the first quarter of this year, 75 data center projects collectively worth $130 billion were stopped or delayed. That’s about the same number as were blocked in all of 2025.

New York Becomes First State To Enact One Year Ban On New Data Centers The blowback against data centers escalated this morning, when New York became first state in the nation to enact a moratorium on data centers, pausing construction on new facilities for one year. An executive order by Gov. Kathy Hochul bans state lawmakers from approving environmental permits for hyperscale data centers. Hochul said Tuesday the pause will give lawmakers time to create a framework to protect residents and the environment.  "Massive data centers are being built across our state and our country. The scale and speed of this development has put unprecedented demand on energy and water resources, and threatens to drive up utility costs. Before it goes any further, I need safeguards in place to protect New Yorkers," Hochul said in a social media post.  AI data centers, which contain thousands of servers and typically use 50 or more megawatts of power to operate, have been blamed for everything from noise pollution to sending regional electricity prices soaring. They also require a steady supply of water to keep cool.  Hochul said the state still welcomes AI investments and businesses, and looks forward to helping them grow and thrive.  "But when you benefit from the talent and energy of New York, we expect you to protect our resources and give back to our communities," Hochul said.  New York will lead in responsible innovation while protecting families and communities. Today, I’m signing a first-in-the-nation Executive Order to hit pause and set the rules for AI data centers. Join me live: https://t.co/5T2eFyoc7m — Governor Kathy Hochul (@GovKathyHochul) July 14, 2026 The order comes as the state is experiencing unprecedented growth in the demand for data center development driven by AI and other computing operations, according to the governor's office. The data centers require "millions of gallons of water, draining the local supply."  "The bottom line is progress shouldn't arrive with a higher utility bill, depleted water supplies, or noise pollution. So we have no choice but to address these challenges created by these massive facilities," Hochul said.  Hochul said New York will require data centers to either produce their own energy or pay a premium for accessing New York's grid. Hochul also said she opposes any tax subsidies for AI data centers as well.  The Department of Public Service will create the guidelines for centers to ensure new facilities meet consistent standards.  Hochul said the process will take up to a year, prompting the moratorium. Once state officials finalize the standards, the ban will be lifted.  Democratic Senator Kirsten Gillibrand applauded the move: "This one-year moratorium is fundamentally about trust. Right now, New Yorkers aren't convinced these massive facilities benefit them. Before we move forward, our communities need ironclad guarantees that their energy bills won't spike, their water will be protected, and their air will remain clean," Gillibrand said.    Gillibrand described the need for federal action regarding AI as well: "That requires establishing clear, reliable rules of the road. We must build a framework that protects our kids from harmful algorithms and social media tools; shields seniors and consumers from AI-driven scams and fraud; and safeguards American jobs and livelihoods from displacement." "It kills good-paying union jobs" Not everyone is pleased with the moratorium.  "A shortsighted moratorium only accomplishes one thing: it kills good-paying union jobs. Rather than implementing guardrails to build the future of American ingenuity, Governor Hochul is taking her ball and going home. We urge the governor to work with all parties, including the hardworking New Yorkers whose jobs are at stake, to implement common sense guardrails," United Association of Union Plumbers and Pipefitters general president Mark McManus said.  The  Associated General Contractors of New York State also objected to the moratorium, calling it "the wrong policy for New York."  "Halting permits for as much as a year in this fast-moving sector will not simply delay projects—it will send them permanently to Virginia, Texas, Georgia and other states actively competing for these investments and the construction and other jobs that come with them. Once a developer breaks ground somewhere else, that project—and the opportunities and tax revenue that come with it—are not coming back," AGS NYS president and CEO Mike Elmendorf said. "Data center construction is the strongest-performing segment in an otherwise uncertain construction market nationwide, and New York's construction industry—which still has not recovered to pre-pandemic employment levels—cannot afford to forfeit it." Elmendorf called the moratorium a "de facto ban that tells the marketplace New York is closed for business." Meanwhile, PA senator John Fetterman, snubbed the NY decision by simply stating "China wins." China wins. 🇨🇳 pic.twitter.com/tTiMwxPNaq — U.S. Senator John Fetterman (@SenFettermanPA) July 14, 2026 A grassroots pushback against data centers has been spreading across the nation in the past year and most recently culminated in the so-called Silion Alley in Virginia - which has the highest concentration of data centers in the US - and where we reported a week ago that giant data center landlord Blackstone is walking away from plans to build its portion (which at this point is the only portion left after its partner already pulled out days earlier) of a 2,100-acre data center campus in Virginia - also known as Prince William Digital Gateway which would house as many as 37 data-center buildings - handing a win to residents who fought for years to topple the project.  Tyler Durden Tue, 07/14/2026 - 16:40

Data centre moratorium pushes have gained steam around the US, with bans proposed in at least a dozen states.

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