Gov. Hochul Defends One-Year Moratorium on Hyperscale Data Centers, Citing Energy and Community Concerns

ALBANY, N.Y. — New York Gov. Kathy Hochul says the state’s first-in-the-nation one-year moratorium on new hyperscale data centers is intended to give lawmakers and regulators time to develop policies that protect electric ratepayers, strengthen the power grid and give local communities more leverage in negotiations with developers.

In an interview Monday with WAMC’s David Gaustina from the New York Public News Network, Hochul said New York is facing a surge of proposals for large-scale data centers that could place significant new demands on the state’s electric grid.

“Right now the companies are literally flooding the zone,” Hochul said, noting there are about 30 applications for hyperscale data centers across New York.

She said the temporary pause is not a ban on data centers but an opportunity to establish rules before additional projects move forward.

“We’re going to set up a system where these data centers have to either bring their own power source or they have to pay an additional premium in the grid so our ratepayers in New York are not hurt by this,” Hochul said.

The governor also said the state wants to create a framework to help local governments negotiate community benefits from data center developers, including direct investments and infrastructure improvements.

Hochul argued that many smaller communities lack the resources to negotiate with large technology companies on their own.

She also said she wants to eliminate state tax incentives for hyperscale data centers.

“I don’t think that our hard-working New Yorkers should be having to subsidize these companies that are making wild profits while taking up our land, our water resources and energy,” she said.

Responding to criticism that the moratorium could drive technology investment to other states, Hochul said New York remains committed to artificial intelligence and innovation.

She pointed to the state’s Empire AI initiative and said New York is using artificial intelligence to review regulations and identify opportunities to streamline state government.

Hochul said the AI review has already identified outdated regulations and recommendations that she said will reduce costs and eliminate unnecessary government requirements.

The governor also discussed the state’s broader energy strategy, saying data center operators should help fund upgrades to New York’s aging electric grid through what she described as a future grid resilience fund.

She said the state remains committed to its clean energy goals despite federal policy changes affecting renewable energy projects.

Hochul criticized the Trump administration for canceling previously approved clean energy grants and said the state has had to adjust its timeline for meeting climate targets because of changing federal policies.

“I expect to meet every goal that I agreed to,” Hochul said. “But they are more realistic in light of this climate right now.”

Image: Governor Kathy Hochul signs an Executive Order on July 14, 2026, in Brooklyn, NY, to create the nation’s first moratorium on new hyper scale data centers. (Susan Watts/Office of Governor Kathy Hochul)