NEW YORK - New York has become the first US state to halt construction of large new data centres, 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.
The moratorium announced on Tuesday positions New York at the forefront of a growing debate over how to manage the infrastructure needed to support artificial intelligence.
While technology companies are racing to build new data centres, lawmakers and regulators in dozens of states are weighing measures to limit their effect on electricity grids, utility bills and local communities.
“As data centre development threatens to hike utility bills, deplete our natural resources and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” said Governor Kathy Hochul, who said she would also pursue legislation to repeal sales tax exemptions for large data centres.
The construction ban will apply to data centres that use 50 megawatts or more of power, officials in the governor’s office said.
During the moratorium, the state’s Department of Environmental Conservation will not issue any discretionary permits not already deemed complete, the governor’s office said.
Instead, Hochul directed state officials to develop a Generic Environmental Impact Statement (GEIS) to ensure that new data centres coming online are being held to “consistent standards”, as well as examine the potential environmental impacts of the construction and operation of data centres in the state.
The ban will be lifted once the state finalises those standards, according to Hochul’s office.
New York’s legislature last month passed a bill meant to impose guardrails on data centres, but it has not yet been sent to Hochul’s desk for signing. Officials in her office described the bill as complicated, adding that “it’s going to take some time to work through” with the state legislature.
The expansion of data centres in the US is driving up power demand — and electricity bills — in many parts of the country, drawing local and political backlash. Only one in three Americans approve of the fast pace of data-centre 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 centres 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 in her state.
As of May, there were more than 12 gigawatts of very large energy-using loads, including data centres, in line to connect to the New York state grid, according to a recent report by the independent grid operator.
The state has the eighth-highest retail prices for residential electricity in the country, according to US Energy Department data.
