New York became the first state in the U.S. to impose a statewide moratorium on new data centers today after Governor Kathy Hochul signed an executive order pausing state environmental permits for large facilities for up to a year.

Executive Order No. 62 took effect on signing and covers hyperscale data centers that draw 50 megawatts of power or more. While it’s in force, the state Department of Environmental Conservation will not issue discretionary permits that have not already been deemed complete.

Hochul cast the pause as a response to the computing demand unleashed by artificial intelligence, which she said threatens to push up electricity bills and drain the state’s energy and water supplies. Proposals for large facilities have piled up across New York, each one capable of consuming enormous amounts of power and water to run and cool thousands of servers.

“As data center development threatens to hike up utility bills, deplete our natural resources and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Hochul said in announcing the order. “New York will lead the way in creating the strongest standards in the nation for data center development, ensuring that when companies succeed because of New York, New Yorkers succeed too.”

The year gives regulators time to write rules for an industry that has outrun them. Hochul directed the Department of Public Service to produce a Generic Environmental Impact Statement, a review expected to run up to a year, that will set consistent standards for judging a data center’s effect on energy demand, water use and quality and air quality. Once those standards are final, the moratorium lifts and projects can move ahead as long as they clear state zoning codes and local approvals.

The order does more than stop the clock. Hochul told Empire State Development to publish a Community Investment Framework within 60 days, giving towns and counties a template for negotiating benefits from developers, from local infrastructure and child care funding to direct payments. The framework also pushes prevailing wage, project labor agreements, local hiring and apprenticeships on data center construction.

Hochul is separately weighing a New York Grid Acceleration Fund that would make data centers pay into the state’s aging power infrastructure and she said she will pursue legislation to repeal the sales tax exemptions that large facilities across the state now enjoy.

Projects already on the drawing board could get caught. A $19.4 billion data center proposed in Genesee County has drawn heavy local opposition and the kind of project the order can reach, an aide told Axios. “To the extent there are projects that still need discretionary permits, we do expect this to impact them,” the aide said.

The order also lets Hochul avoid a decision on legislation. State lawmakers passed the Responsible Data Center Development Act in June, but the governor has not signed it. An aide called the bill complicated and said an executive order was the fastest way to act now. The legislation reaches further in places, covering projects above 20 megawatts, setting up separate electricity and water rate classes and requiring a public hearing before any permit.

New York is the first state to go this far, though it is not alone in moving against the industry. Dozens of cities and counties have passed their own data center bans and last month Arizona Governor Katie Hobbs signed a three-year moratorium on new sales tax breaks for the facilities.

Image: SiliconANGLE/Ideogram