This month, New York gained the unenviable distinction of being the first state to put a moratorium on new data center construction. It’s a predictable impulse as voters search for something to blame for rising electricity costs—but Ms. Hochul would be wiser to look closer to home.

Governor Kathy Hochul (D) announced the moratorium via executive order, applying to data centers with power needs of 50 megawatts (MW) or more. The order will pause permitting for up to a year while the state examines the impacts of data centers in New York through public hearings, a working group, and two new initiatives focused on community benefits and how data centers will need to finance grid improvements and fund renewables. 

The executive order overlaps with the Responsible Data Center Development Act, which the New York legislature passed to impose a moratorium on projects 20 MW or more. This lower threshold threatens to subsume smaller, enterprise-level data centers that handle run-of-the-mill internet applications, not artificial intelligence (AI). The bill also includes a suite of environmental review requirements and mandates data centers obtain at least one-third of their power use from renewable energy from 2030 to 2034, two-thirds from 2035 to 2039, and 90% in 2040 and thereafter. 

Ms. Hochul has until the end of the year to decide whether to veto the bill or allow it to pass into law, but it’s likely that her order is a compromise with the legislature’s more burdensome approach. That is cold comfort to those who’d like to invest in New York.  

New York’s high rates—the 8th-highest nationwide in 2025—owe much less to data centers than they do to the state’s long-standing policies that have constrained natural gas supply and pushed affordable, dispatchable power sources off New York’s grid. 

The state’s mistakes are many. Its ban on hydraulic fracturing was meant to be temporary, too, but was banned in 2014 after seven years of environmental review and codified in 2020. Look for a repeat with a so-called “temporary” data center moratorium. State agencies have repeatedly denied permits to natural gas pipelines that would expand supply in New York and across the Northeast. And in 2021, the state closed the Indian Point nuclear plant, which pushed in-state generation emissions up 35% in its first month offline because the state needed to replace its generation with natural gas. 

Had the state not foreclosed new generation opportunities and trimmed its grid reserves to meet green-energy requirements in the Climate Leadership and Community Protection Act, data center demand wouldn’t have posed such a crisis. 

If Ms. Hochul is concerned that data centers won’t pay for the grid capacity they use, she should check in with her own Public Service Commission, which she has directed months ago to set interconnection rules, cost allocation, and large-load tariffs. Ms. Hochul’s moratorium won’t merely pause investment, but will opt the state out of an industry that could bring benefits to New Yorkers.