The New York State Legislature voted on Thursday (June 4) to approve a one-year moratorium on issuing permits for new data centers. This move aims to address concerns about the energy demands and environmental impact of these facilities. If Governor Kathy Hochul signs the measure into law, New York would become the first state to implement such a temporary ban.

The bill, which applies to data centers requiring more than 5 megawatts of power, has sparked debate among various stakeholders. Advocates, including Food & Water Watch, argue that the pause is necessary to evaluate the impact of data centers on local communities, utility rates, and the environment. They emphasize the need for careful planning to protect the energy grid and prevent rate hikes.

On the other hand, business and tech groups, such as the Business Council of New York, express concerns that the moratorium could hinder economic growth and competitiveness. Julie Samuels, president and CEO of Tech:NYC, urged Governor Hochul to veto the bill, emphasizing the importance of continued investment in infrastructure projects.

State Senate Majority Leader Andrea Stewart-Cousins supports the moratorium, stating that it provides an opportunity to develop comprehensive rules for data center operations. After the moratorium, stricter requirements, such as prevailing wage mandates and renewable energy usage by 2040, will be enforced.

Governor Hochul has yet to decide on the bill, but she has previously suggested that permitting decisions should be left to local authorities. The legislative session concludes this week, and the outcome of this bill could set a precedent for other states considering similar measures.