Executive Order pauses DEC permits for data centers in New York

New York Governor Kathy Hochul has issued Executive Order No. 62 (EO), an immediate administrative action that pauses permitting for certain data centers over 50 megawatts (MW) and gives state agencies time to evaluate standards for data center development, environmental review, grid impacts, water use, and community benefits. The EO comes amid growing data center load requests in New York, with the EO citing nearly 12 gigawatts (GW) in the New York Independent System Operator interconnection queue as of May 2026, including more than 8 GW that entered the queue in 2025 alone.

The EO is narrower than Assembly Bill A11560 (A11560), the proposed Responsible Data Center Development Act that passed on June 4, 2026 (see DLA Piper’s previous client alert for more details), but addresses many of the same policy concerns, such as permitting delays, environmental review, utility cost allocation, water use, community benefits, and labor standards. For data center developers, investors, utilities, large energy users, and host communities, the EO is an immediate administrative action that could affect project timing, permitting strategy, interconnection planning, and cost allocation.

Key takeaways

The EO directs the Department of Environmental Conservation (DEC) to hold in abeyance certain discretionary permit applications for the construction or expansion of covered data centers until the Department of Public Service (DPS) submits a final Generic Environmental Impact Statement (GEIS) and associated findings statement. The moratorium applies to applications that are or may become pending before the DEC and that were not determined to be complete before the date of the EO. It does not apply to permits, approvals, licenses, or similar permissions issued by local governments.

In addition, the EO sets the process for the statewide review. DPS must initiate a formal public process, including public comment and a public hearing, to prepare a GEIS under the State Environmental Quality Review Act (SEQRA). The GEIS must assess potential environmental impacts from the construction and operation of data centers in New York, including energy demand, water use and quality, air quality, disproportionate impacts on disadvantaged communities, and noise levels.

Under the EO, a covered data center is generally defined as a facility that meets an energy-consumption threshold of 50 MW and is used to house servers, computing, or telecommunications equipment for data storage, processing, distribution, or management. The definition excludes facilities primarily used for manufacturing, research, education, or medical care, including certain academic research facilities and the state’s Empire AI consortium or institute.

Regarding community benefits, the EO directs Empire State Development to create a Community Investment Framework within 60 days. According to the EO, the framework is intended to assist localities in negotiating community benefits with data center developers or operators, including community investment funds, local infrastructure investments, organized labor participation, prevailing wage standards, project labor agreements, local hiring, apprenticeships, workforce development, and transparency reporting.

Regarding grid impacts and cost allocation, the EO directs DPS to consider a mechanism to protect customers from significant costs and stranded-asset risks associated with data center load growth, potentially including a New York Grid Acceleration Fund. The contemplated mechanisms may require data centers to make upfront capital contributions, participate in demand response programs, support procurement of new clean energy supply, and contribute to an insurance pool.

Implications for data center projects

The EO may immediately affect projects that require discretionary DEC approvals and have not received a DEC completeness determination before the date of the EO. Developers with projects in the DEC permitting pipeline are encouraged to evaluate whether pending or future applications are subject to the abeyance directive and whether any local approvals remain available outside the scope of the EO.

Project sponsors may also consider the impact of the forthcoming GEIS process on project schedules, diligence assumptions, and permitting conditions. Because the GEIS is expected to address energy demand, water use and quality, air quality, disproportionate impacts on disadvantaged communities, and noise, these topics may receive increased scrutiny in project planning, environmental review, and public engagement.

The EO’s grid-related directives may affect both interconnection strategy and utility-cost exposure. DPS is directed to form a Data Center Interconnection Working Group within 60 days to address interconnection issues and “beneficiary pays” principles for network upgrade and resource adequacy costs. DPS is also directed to consider mechanisms that may require upfront capital contributions, demand response participation, clean energy procurement support, and insurance-pool contributions by data centers.

Engagement with local communities may also become a focus. The forthcoming Community Investment Framework is expected to address community investment funds, infrastructure investments, labor standards, local hiring, apprenticeships, workforce development, and transparency reporting. Although the EO describes the framework as a tool that localities and other governmental entities may use, A11560 would go further by requiring certain large data centers and major expansions to fund host-community programs.

Practical considerations

Developers and financing parties are encouraged to identify whether proposed or pending projects fall within the EO’s 50-MW definition or within A11560’s lower 1-MW, 5-MW, and 20-MW thresholds. That threshold analysis could affect permitting strategy, environmental diligence, interconnection planning, utility-rate exposure, renewable procurement planning, labor-cost assumptions, and community-benefit obligations.

Sponsors may also wish to evaluate whether DEC applications have already been determined complete, because the EO’s abeyance directive turns in part on that status. Sponsors may also evaluate whether any local permits or approvals remain available while state-level review proceeds, as the EO expressly excludes local government permits and approvals from the moratorium.

Utilities and large-load customers are encouraged to monitor DPS proceedings relating to interconnection reform, cost allocation, and any potential New York Grid Acceleration Fund. Those proceedings may shape whether and how data centers are required to bear grid-upgrade costs, resource adequacy costs, stranded-asset risk, and clean-energy procurement costs.

Data center developers may also wish to prepare for increased public-facing disclosure regarding energy use, water use, wastewater impacts, economic incentives, and community impacts. A11560’s project-level hearing provisions would require notices to host-community residents that include detailed explanations of projected energy use, projected water use and wastewater impacts, and state and local economic incentives.

How the EO compares to A11560

A key difference is scope. The EO uses a 50-MW threshold for covered data centers and focuses on certain discretionary DEC permits. A11560 uses lower and more varied thresholds, defining a “data center” generally as a facility with peak demand of 1 MW or more, classifying a “large data center” as a data center with peak demand of 20 MW or more, and applying certain renewable-energy and labor obligations to facilities with peak load or demand of 5 MW or more.

The two measures also take different approaches to timing and grandfathering. Under A11560, the key carve-outs are modifications, renewals, reissuances, and recertifications of existing approvals and projects that commenced construction on or before the effective date. Under the EO, there is no such grandfathering mechanism. Instead, the applicability of the EO depends on DEC permitting status. Applications that have already been determined to be complete before the EO are outside the abeyance directive. The EO does not include A11560’s construction-commencement grandfathering concept. Both measures, however, include carve-outs for facilities used for manufacturing, research, education, or medical care, including certain academic research facilities and the state’s Empire AI consortium or institute.

A11560 would also impose more detailed statutory obligations if enacted. In addition to its broader thresholds, the bill would address renewable energy, labor standards, host-community programs, and project-level public hearings beyond the EO’s immediate agency directives.

Looking ahead

The EO signals greater scrutiny for environmental, grid, water, and community-benefit concerns for large data center projects in New York.

For market participants, the EO may be treated as both an immediate permitting development and a preview of potential statutory regulation. Those affected by the EO are encouraged to focus on project-specific permitting status, energy and water impact analyses, interconnection cost exposure, community-benefit strategy, and how state agencies implement the EO while A11560 remains under consideration.

For more information, please contact the authors.