New York halts $10B in data centers with first statewide ban

Governor Kathy Hochul signed an executive order Tuesday imposing a one-year ban on new data centers of 50 megawatts or more, the first statewide moratorium of its kind in the country, freezing an estimated $10 billion of development while the state rewrites the rules for how these projects connect and get sited.

Why it matters

For developers chasing hyperscaler demand, this is a site-selection event, not a footnote. Power availability, not land or zoning, has been the gating constraint on data centers, and New York just converted a physical bottleneck into a legal one. Projects in the pipeline now face a hard pause, and the signal to capital is that the country’s most politically sensitive markets can freeze a sector overnight. Expect load to keep routing toward low-regulation, power-friendly corridors in the Sun Belt and the I-20 belt, where interconnection queues are long but the policy risk is lower. The order also directs the state to pursue repealing sales-tax exemptions for data centers, a direct hit to the deal math that made New York pencil in the first place.

The numbers

The moratorium covers facilities of at least 50 MW, above the 20 MW threshold the legislature had floated. As of May, nearly 12 gigawatts of data center load sat in the interconnection queue, with more than 8 GW entering in 2025 alone. Hochul cited New York’s status as home to the second-highest commercial electricity rates in North America. The Department of Public Service must convene a working group within 60 days to untangle interconnection, while the Department of Environmental Conservation will withhold discretionary permits during the pause.

What’s next

Watch whether other high-cost, grid-constrained states copy the template, and where the stranded demand lands. Contractors are already pushing back on the lost work. For more on the power-first calculus reshaping these deals, see our data centers coverage and the New York market hub.