New York has become the first state in the United States to ban the construction of new data centers of large size, such as those needed to operate artificial intelligence systems: on Tuesday, Governor Kathy Hochul, of the Democratic Party, signed an executive order providing for a one-year moratorium.
WHAT THE NEW YORK MORATORIUM ON LARGE DATA CENTERS ENTAILS
The measure prohibits state agencies from approving permits for data centers that consume 50 megawatts or more of electricity. The ban does not apply to infrastructures that provide services to hospitals and universities, and that are smaller in size.
Large projects already approved will not be postponed, but those still awaiting authorization will be suspended.
The executive order also instructs the Department of Environmental Conservation to draft a document containing guidelines for the construction and management of data centers, taking into account possible impacts on water supplies (these facilities need a lot of water for server cooling), electricity consumption (they require a constant electricity supply, 24/7), and noise pollution. The construction ban will be lifted once these parameters are defined, but in any case, it cannot last longer than one year.
Hochul also said she intends to repeal a law containing some tax incentives for large data centers. However, the governor did not sign a law passed last month by the New York legislature with a much broader scope than the executive order, as it imposes restrictions on data centers consuming 20 MW or more.
HOW MANY DATA CENTERS ARE THERE IN THE STATE OF NEW YORK?
There are over one hundred thirty data centers in the state of New York, and the state ranks eighth in the list of places in the United States where electricity costs the most for citizens.
THE PROBLEM WITH ELECTRICITY BILLS…
Currently, data centers account for 4-5 percent of the entire electricity consumption in the United States. In locations near large data centers, electricity bills have increased by as much as 267 percent over the past five years.
… BUT ALSO WITH WATER AND NOISE POLLUTION
But American citizens are not unhappy with data centers only because of the rise in electricity bills. These infrastructures also consume large amounts of water: 17.4 billion gallons in 2023 – over 65 billion liters – a volume that could reach 38-73 billion gallons by 2028, according to estimates from the Lawrence Berkeley National Laboratory. A single large data center can consume up to five million gallons of water per day, which is the entire water demand of a city of 10,000-50,000 inhabitants, wrote Quartz.
And then there is noise pollution. The Environmental and Energy Study Institute has collected cases of headaches, dizziness, nausea, and sleep disturbances among people living near data centers: continuous exposure to the noise from these facilities is believed to be involved.
U.S. STATES AGAINST DATA CENTERS
Currently, the only U.S. state with a data center moratorium in effect is New York. But ten others have drafted similar laws, although not yet approved or rejected: Maine, Vermont, Oklahoma, Maryland, Georgia, Minnesota, Wisconsin, Michigan, New Hampshire, and Virginia.
Oklahoma’s SB 1488, for example, would ban the construction of all new data centers until November 2029. While Vermont’s S.205 would suspend projects with a capacity over 10 MW until July 2030.
THE TRUMP LINE
The federal government’s direction, however, is very different. With the AI Action Plan of July 2025, Donald Trump’s administration aimed to speed up the operation of data centers by relaxing environmental regulations, simplifying authorization processes, and granting federal lands. The White House also moved to facilitate tech companies’ access to electricity.
Last January, however, Trump wrote on the social network Truth: “I don’t want Americans to pay higher electricity bills because of data centers. Therefore, my administration is working with leading American tech companies to ensure their commitment to the American people, and in the coming weeks we will have much to announce.”
One of the president’s main domestic policy goals is lowering the cost of living for citizens, and this must be taken into account – whether for gasoline or bills – ahead of the midterm elections next November: the Democratic Party could gain seats in the House by leveraging voters’ discontent over the high cost of living.
