New York Blocks New Hyperscale Data Center for a Year

New York became the first U.S. state on Tuesday to halt construction of large new data centers, imposing a one-year moratorium as concerns grow that the facilities driving the artificial-intelligence boom are raising power costs, straining water supplies and burdening local communities.

New York Governor Kathy Hochul announced the moratorium at an event in New York City.

Hochul said she will also pursue legislation to repeal sales tax exemptions for large data centers.

The construction ban will apply to data centers that use 50 megawatts or more of power, officials in the governor's office said.

While the state's expensive land and tight power supplies have largely limited data center interest compared to states like Texas and Ohio, New York has attracted some interest from the server warehouses.

The state currently has more than 130 data centers, according to Data Center Map, compared with more than 600 in Virginia and about 500 in Texas.

The expansion of data centers in the United States is driving up power demand — and electricity bills — in large swaths of the country, drawing local and political backlash.

Only one in three Americans approve of the fast pace of ​data-center construction and most would oppose building one in their own community, according to a recent Reuters/Ipsos poll.

Dozens of state legislatures have introduced bills to rein in the effects of data centers on power bills and the environment. New York is the first to enact a full moratorium.

In April, Maine Governor Janet Mills vetoed a bill that would have imposed a similar freeze on those facilities.

As of May, there were more than 12 gigawatts of very large energy-using loads, including data centers, in line to connect to the state's grid, according to a recent report by the New York independent grid operator. One gigawatt of electricity can power about 750,000 homes.