ALBANY, New York: New York has become the first U.S. state to impose a moratorium on the construction of large new data centers, pausing projects for up to a year as concerns grow over their impact on electricity costs, water resources and local communities.

The move places New York at the center of a national debate over how to manage the infrastructure needed to support the rapid expansion of artificial intelligence. As technology companies accelerate data center construction, lawmakers across the country are considering measures to address pressure on power grids, utility bills and the environment.

"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," Governor Kathy Hochul said. She added that she would also pursue legislation to repeal sales tax exemptions for large data centers.

The moratorium applies to data centers consuming 50 megawatts or more of electricity, according to officials in the governor's office.

During the pause, the state's Department of Environmental Conservation will not issue discretionary permits for projects that have not already been deemed complete.

Hochul also directed state agencies to prepare a Generic Environmental Impact Statement to establish "consistent standards" for future data centers and assess the environmental effects of their construction and operation. The moratorium will be lifted once those standards are finalized.

The move comes after New York's legislature passed a bill last month proposing additional safeguards for data centers. The measure, which has not yet reached Hochul's desk, would apply to facilities consuming more than 20 megawatts of power.

Officials in the governor's office described the legislation as complex and said it would require further work with lawmakers.

The rapid expansion of AI-driven data centers has fueled opposition in several states as electricity demand and utility costs rise.

A recent Reuters/Ipsos poll found that only one in three Americans supports the current pace of data center construction, while most respondents opposed having one built in their own community.

Dozens of state legislatures have introduced proposals to address the impact of data centers on power costs and the environment, but New York is the first state to implement a full moratorium.

As of May, more than 12 gigawatts of large energy-consuming projects, including data centers, were waiting to connect to New York's power grid, according to the state's independent grid operator. The state currently has more than 130 data centers, compared with more than 600 in Virginia and about 500 in Texas.