New York Governor Kathy Hochul issued Executive Order No. 62 (the EO) on July 14, 2026, establishing a moratorium on certain data center permitting activities while state agencies develop new standards governing data center development and a framework for securing benefits for host communities. With the issuance of the EO, New York became the first state in the nation to impose a statewide moratorium on new data center development.
The EO arrives after months of escalating public and regulatory attention to large loads. On June 4, 2026, both houses of the New York State Legislature passed the Responsible Data Center Development Act (S10642/A11560), which would impose a one-year moratorium on certain New York State Department of Environmental Conservation (NYSDEC) approvals for large data centers. The governor has not signed that bill. Relatedly, the New York State Public Service Commission (NYSPSC) instituted Case 26-E-0045 on February 12, 2026, to advance “Energize NY Development” and reform how large loads interconnect to the grid; the New York Independent System Operator, Inc. (NYISO) has been weighing revisions to its large load interconnection study process; and the Federal Energy Regulatory Commission issued show cause orders to all six Regional Transmission Organizations, including the NYISO, directing each to justify the tariff provisions governing large load interconnections as just and reasonable, or to propose reforms. Underlying these developments is the unprecedented growth in data center interconnection requests, which had reached nearly 12 gigawatts of proposed load in the NYISO interconnection queue as of May 2026.
The EO took effect immediately upon its issuance on July 14, 2026. However, it does not establish a fixed expiration date. Instead, the permitting moratorium remains in effect until the New York State Department of Public Service (DPS) submits a Final Generic Environmental Impact Statement (GEIS) and associated findings statement, making the duration of the moratorium contingent on completion of that review process. Although the EO does not impose a deadline for completion of the GEIS, the press release announcing the EO characterizes the moratorium as a “one-year pause” and states that preparation of the GEIS “will take up to a year.” This suggests the State expects the review process to conclude within one year, even though the text of the EO does not require that outcome or otherwise limit the duration of the moratorium.
How the EO Defines “Data Center”
The EO defines “data center” as a facility or group of facilities on the same or contiguous sites used to house computer servers, associated components, or computing or telecommunications equipment for the storage, processing, distribution, or management of data. To fall within the EO, the equipment must also carry three characteristics:
- It is housed in facilities with uninterruptible power supply systems, specialized cooling designed for high-density computing loads, or cybersecurity systems for secure digital infrastructure;
- It provides data storage, cloud computing, or content delivery to customers, internal operations, or affiliated business operations, often on a continuous 24-hour cycle; and
- It consumes or can consume 50 MW of energy or more.
That 50 MW threshold is a significant departure from the Legislature’s approach, which would reach data centers at 1 MW and “large data centers” at 20 MW.
The EO carves out facilities primarily used for manufacturing, research (including quantum computing and biomedical research), education (including accredited New York colleges and universities engaged in academic research, and the Empire AI consortium), or the provision of medical care.
Permitting Moratorium and the GEIS
The EO directs the DPS to examine the impacts associated with interconnecting data centers to the electric distribution network through Case 26-E-0045, and, in connection with that proceeding, to initiate a formal public process (including public comment and a public hearing) to create a GEIS under the State Environmental Quality Review Act (SEQRA). The GEIS will assess the potential environmental impacts of constructing and operating data centers in the State, including energy demand, water use and quality, air quality, disproportionate impacts on disadvantaged communities, and noise levels. The DPS will consult with the NYSDEC and other relevant agencies and authorities and will submit a report, including the Final GEIS and findings statement.
Until that report is submitted, NYSDEC must hold in abeyance all applications for any discretionary permit, approval, license, or similar form of permission for the construction or expansion of a data center that are, or may become, pending before the agency and that were not determined complete before July 14, 2026. Applications already deemed complete are not subject to the moratorium.
Applicants for permits, approvals, licenses, or similar authorizations for projects that are not data centers may be required to provide information demonstrating their projects do not relate to the construction or operation of a data center and are therefore not subject to the EO.
The moratorium reaches state permitting only. It does not apply to permits, approvals, licenses, or similar forms of permission issued by local governments.
Community Investment Framework
The EO also directs the Empire State Development (ESD), within 60 days, to consider public feedback on, then create and post on its website, a Community Investment Framework (CIF) to help localities analyze and attain local economic benefits and mitigate the negative effects of hosting a data center. ESD has already published a policy outline for the CIF.
The premise of the CIF is that data centers place substantial demand on local resources, including electricity, water, and public infrastructure, while generating relatively few permanent jobs compared to other large-scale capital investment projects. The CIF is intended to ensure the benefits of data center development accrue to host communities and to establish a consistent framework for large-scale data center projects, providing local governments and developers with a common basis for negotiating community benefits.
The CIF template is expected to be organized around four core components: (1) “good neighbor commitments,” addressing issues such as site design and mitigation of local impacts; (2) labor commitments, focused on prevailing wages, project labor agreements, local hiring, and workforce development; (3) a Community Investment Fund, through which developers would support locally identified priorities and community benefits, such as public infrastructure improvements or housing initiatives; and (4) transparency, requiring reporting on economic, environmental, and operational metrics associated with the project.
As a baseline for negotiations, ESD is directed to establish guidance on contribution levels that would create a minimum investment threshold. The policy outline identifies, as an example, a contribution of $1 million per megawatt of anticipated utility demand, while emphasizing this threshold is intended to serve as a starting point, with final contribution levels and eligible investments tailored to the circumstances and priorities of each host community.
Members of the public may submit feedback on the CIF over the next 30 days to DataCenterCIF@esd.ny.gov.
New York Grid Acceleration Fund
The EO further directs the DPS, through Case 26-E-0045, to consider developing a mechanism to protect utility customers from significant costs and the risk of stranded assets associated with large-load interconnections, including the potential establishment of a New York Grid Acceleration Fund (the Fund). Under the EO, the Fund could require data centers to contribute through:
- Upfront capital contributions to finance grid improvements;
- Participation in demand response programs;
- Support for the procurement of new clean energy resources, including distributed energy resources; and
- Contributions to an insurance or risk-sharing pool.
The EO directs the DPS to evaluate how such contributions should be structured, including appropriate contribution levels and the allocation of collected funds, and to consider a process for working with utilities and other stakeholders to identify necessary grid infrastructure investments. The Fund could also include measures designed to protect ratepayers from project delays, scope changes, or cancellations that result in stranded assets. In addition, the DPS may evaluate approaches requiring data centers to fund clean generation and/or battery storage dedicated to serving their operations, including customer-sited distributed energy resources (DERs), to the greatest extent feasible. The EO further notes that the Fund could be used to support energy affordability initiatives.
Separately, the EO directs the DPS to establish a Data Center Interconnection Working Group within 60 days to address interconnection issues associated with data centers and other large loads and to support implementation of “beneficiary-pays” principles. The DPS must also convene the State’s transmission owners to review methodologies for assessing the system impacts and costs of large-load interconnections and report its findings to the NYSPSC within 90 days. The EO further notes that the DPS and the NYSPSC may develop service classifications and other requirements applicable to data centers.
Water Withdrawal Review
Finally, the EO directs the NYSDEC to assess whether new or amended regulations, policies, reporting, or guidance are appropriate to ensure its water withdrawal program requirements under 6 NYCRR Parts 601 and 602 reflect the water demands of large-use customers, including data centers. No later than 12 months after the EO, the NYSDEC must deliver a report setting forth the results of the assessment and identifying potential regulatory, policy, and guidance actions.
Key Dates
As described above, the EO establishes several key deadlines and milestones, measured from its July 14, 2026, issuance date, as follows:
- August 13, 2026 (30 days): deadline for public feedback on the CIF policy outline (DataCenterCIF@esd.ny.gov)
- September 12, 2026 (60 days): ESD creates and posts the Community Investment Framework
- September 12, 2026 (60 days): DPS forms the Data Center Interconnection Working Group
- October 12, 2026 (90 days): DPS reports to the NYSPSC on transmission owners’ practices and methodologies for studying large-load system impacts
- July 14, 2027 (12 months): NYSDEC delivers its water withdrawal assessment report
- No fixed date: DPS submits the Final GEIS and findings statement. The NYSDEC permitting abeyance continues until that report is submitted. The GEIS process will include public comment and a public hearing; dates have not been set.
In implementing the EO, NYSDEC, DPS, and ESD must consult with one another and with partner agencies and authorities, including the Authorities Budget Office, the Department of Health, the New York State Energy Research and Development Authority, the Long Island Power Authority, the Department of State, and the NYISO.
Harris Beach Murtha’s Energy Industry Team regularly assists data center developers with siting, permitting, interconnection, and other regulatory issues arising under New York law. We continue to monitor implementation of the EO, Case 26-E-0045, and related legislative and regulatory initiatives, and can help clients assess the implications of these developments for existing and proposed projects.
If you have questions, please reach out to attorney John T. McManus at (518) 701-2734 and jmcmanus@harrisbeachmurtha.com; attorney Jeffrey D. Kuhn at (518) 701-2746 and jkuhn@harrisbeachmurtha.com; attorney Joshua Schneider at (518) 701-2744 and jschneider@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
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