In Western New York, Governor Hochul Highlights First Statewide Moratorium on New Hyperscale Data Centers as Support Continues to Grow

Governor Kathy Hochul today held a roundtable with state, business and local leaders from Western New York to highlight her Executive Order that creates the nation’s first moratorium on new hyperscale data centers, establishing the strongest standards for data center development and creating a blueprint to support localities. The Governor is temporarily pausing State environmental permits for up to one year in order to build a nation-leading regulatory framework that protects ratepayers, the environment, the energy grid and communities across the state.

“Here in New York, we will not burden our communities with rising utility costs and have them put their hard-earned taxpayer dollars toward massive data centers that aren’t ready to prioritize their future,” Governor Hochul said. “This first-in-the-nation statewide moratorium is putting the success of those who call New York home first, and we are developing a framework to ensure our communities don’t feel — and have to pay for — the environmental impacts to support these projects.”

Participants of today’s roundtable included:

• Krista Atkinson, Executive Administrator, Tonawanda Chamber of Commerce
• Melisa Dettbarn, Teacher, Kenmore, Tonawanda School District
• Ted Kusio, Former Creative Director for Stand Up for Science
• Kate Powers, Visiting Assistant Professor of Theatre at the University of Idaho
• Frank Laurendi, Retired Construction Engineer
• State Senator Jeremy J. Zellner
• Assembly Majority Leader Crystal Peoples-Stokes
• Assemblymember William Conrad
• Deputy County Executive Lisa Chimera, Erie County
• Mayor Michael Ferguson, Fredonia
• John Flynn, Town Supervisor, Town of Tonawanda
• Mayor Austin Tylec, City of North Tonawanda
• Mayor Patrick Mang, Village of Kenmore

New York State is experiencing unprecedented growth in demand for data center development driven by artificial intelligence and other computing operations. The increase in demand has led to proposals across the state for the construction and operation of data centers that could require massive amounts of energy and water to run and cool thousands of computer servers.

Earlier this year, the Governor directed the Department of Public Service (DPS) to begin the Energize NY proceeding, which will require data centers to either pay more for their energy or supply their own, allowing the state to keep energy more affordable for New Yorkers. As part of that proceeding, the Governor is now also directing DPS to develop a Generic Environmental Impact Statement (GEIS) for data centers to ensure new data centers coming online are being held to consistent standards. During the development of this GEIS, which will take up to a year, a moratorium will be in place and the Department of Environmental Conservation (DEC) will not issue any discretionary permits not already deemed complete. The state will use the GEIS to assess the potential environmental impacts of the construction and operation of data centers in the state, including their effect on energy demand, water use and quality, and air quality. Once the State finalizes these standards, the moratorium will be lifted, allowing new data center projects to proceed as long as they follow state, zoning code and other local approvals.

The Governor also directed Empire State Development (ESD) to issue a Community Investment Framework (CIF) within 60 days, which will provide clear guidance to local entities to help them negotiate community benefits as part of any large-scale data center deal, including local infrastructure improvements, child care investments, and direct financial support for their community. The CIF will also establish frameworks that provide organized labor a seat at the table and prioritize prevailing wage standards and project labor agreements for data center construction, local hiring, apprenticeships and workforce development to maximize economic benefits. This framework will additionally include a formula to help communities assess where to begin investment negotiations. An outline of the CIF is currently available on ESD’s website, and the public is encouraged to submit feedback.

Additionally, the Governor is directing DPS to consider creating a New York Grid Acceleration Fund to require data centers to invest in the state’s aging grid infrastructure and energy needs so all New Yorkers benefit from responsible development. The fund could support the procurement of new clean energy supply and establishment of an insurance pool to which developers may need to contribute to protect against speculative large loads that create uncertainty and increase costs. DPS will also consider approaches to require data centers to fund new clean electric generation dedicated to their operations, including but not limited to customer-sited distributed energy resources and battery storage.

Finally, Governor Hochul is pursuing legislation to repeal sales tax exemptions for massive data centers across the state.

State Senator Jeremy Zellner said, “Western New York welcomes innovation and economic growth, but it must be done responsibly and with the interests of our communities at the forefront. As data center development moves forward, we need strong standards that protect ratepayers, preserve our environment, and ensure local communities have a seat at the table. I applaud Governor Kathy Hochul for taking action to establish the nation’s first framework for responsible data center development and for recognizing that the future of this industry must be built with accountability, transparency, and the needs of our neighbors in mind.”

Assemblymember Bill Conrad said, “In listening to many hundreds of my constituents on this issue, it became clear we needed to 'press pause' on data centers, to afford state and local governments due time to fully understand and consider their impacts, both positive and negative. Especially here in Upstate New York, where we have so much to offer developers, we must exercise discernment and be rightly protective of this region's natural resources, union jobs, ratepayers' wallets, our tax base, and an overall quality of life. In other words, we must strike the right balance. I am appreciative of Governor Hochul's like-minded approach to this, as well as of her characteristic willingness to gather input directly from community members. Ultimately, we can responsibly accommodate a growing technology while at the same time heeding people's well-founded concerns about data centers.”

Deputy Erie County Executive Lisa M. Chimera said, “Erie County welcomes innovation and economic opportunity, but that progress must be balanced with protecting our communities, preserving our natural resources and keeping energy affordable for families. This moratorium gives New York the time to develop thoughtful safeguards for our environment, energy grid and ratepayers while establishing clear expectations for responsible development. I thank Governor Hochul for signing this executive order addressing hyperscale data center development and for her leadership in bringing stakeholders together to create a framework that supports innovation while putting New Yorkers first.”

Town of North Tonawanda Mayor Austin C. Tylec said, “North Tonawanda has seen firsthand what can happen when data center development moves faster than the regulations meant to protect residents. I support Governor Hochul’s temporary pause so New York can establish a clear regulatory framework and give communities the tools they need to fully evaluate these projects and their potential impacts.”

Village of Kenmore Mayor Patrick Mang said, “I applaud the Governor's moratorium on the data centers in New York . It gives local officials the time to gather the information we need to make a well informed decision concerning data centers.”

Village of Fredonia Mayor Michael Ferguson said, “I believe the Governor's moratorium on data centers helps smaller communities like ours in the long run. By stepping back and examining all options, this gives communities the opportunity to have skin in the game. This now becomes a partnership with the State; working together to set the standards for our communities. This saves our communities thousands if not hundreds of thousands of dollars developing individual studies and standards by allowing us to umbrella beneath one set of ‘statewide’ regulations.”

Town of Tonawanda Supervisor John Flynn said, “I want to thank the Governor for her leadership on this important issue. Putting a pause on data centers for a year will give all stakeholders the opportunity to analyze and study the numerous concerns surrounding these facilities.”

Since taking office, Governor Hochul has ensured New York is leading the nation in AI innovation and development. As part of her FY25 Budget, the Governor launched Empire AI, a nation-leading initiative to advance AI research for public good. This year, she launched the FutureWorks Commission to advise on policy and private sector actions to protect the security of workers while harnessing the economic benefits of AI for all New Yorkers. This blue ribbon Commission is composed of nation-leading experts, workers’ advocates, and business leaders, and will be charged with advising Governor Hochul on how to navigate the AI transition, so that the benefits of AI can be shared among New York’s families, workers, and small businesses — not just large corporations.

Governor Hochul also implemented nation-leading safeguards to keep New Yorkers safe online and to ensure safe and responsible AI use in New York State. Initiatives include:

• The SAFE for Kids Act and Child Data Protection Act that restrict addictive feeds for kids and prevent online operators from collecting and monetizing children’s data without informed consent.
• AI Companion legislation which set first-in-the-nation safeguards, diverting user conversations about self-harm to mental health resources and interrupting unhealthy addictive behaviors. The Governor also outlawed AI-Generated Child Sexual Abuse Material.
• The recently signed Warning Labels bill that will require social media companies post warnings about the platform's potential impact on mental health.
• AI Deceptive Practices Act, which enhances protections against unauthorized use of likeness/voice and the unauthorized dissemination of intimate images.

This year, the Governor’s Safe by Design Act was enacted in the FY27 State Budget. Safe by Design ensures that parental controls for kids are set at the highest protections on common social and gaming platforms, which means that non-connections above the age of 18 cannot privately communicate with kids, view their full profile, or tag them in content. Location settings will also be turned off by default, and children under 13 must receive parental approval for new connections. It also disables certain AI chatbot features on online platforms for kids and parents must be able to set limits on children’s financial transactions on online gaming platforms and view their child’s transaction history. While many of these platforms have increased their security features for kids, in New York it is now the law, and cannot be relaxed by these platforms over time.

Additionally, Governor Hochul is creating a first-of-its kind Office of Digital Innovation, Governance, Integrity, and Trust (DIGIT). DIGIT will serve as a central, authoritative body for digital safety and technological governance, devising new approaches and ensuring consistent enforcement to keep New Yorkers safe online while protecting New York’s position as a state that values and invests in cutting-edge innovation. The DIGIT Office will first focus on regulating large frontier AI developers as outlined in the RAISE Act, enabling greater transparency into their safety measures and establishing a reporting mechanism for developers to report critical safety incidents. The effective date of the law is January 1, 2027.