Key Takeaways from New York Data Center Permitting Pause Under Executive Order No. 62

On July 14, 2026, New York became the first state in the country to temporarily pause portions of the permitting process for certain large-scale data center projects (defined as facilities that consume or can consume 50 megawatts or more) while it develops a broader regulatory framework given that there are more than 12 gigawatts of data center load interconnection requests pending. Gov. Kathy Hochul's Executive Order No. 62 (the Executive Order) directs the New York State Department of Environmental Conservation (DEC) to hold in abeyance certain pending and future discretionary environmental approvals for qualifying data center projects as the state evaluates the industry's impacts on electric infrastructure, water resources, the environment, and surrounding communities. The Executive Order exempts facilities primarily used for manufacturing, research, education, or medical care.

Key Takeaways

• New York has temporarily paused certain discretionary DEC permitting for data center projects that consume or can consume 50 megawatts of energy or more.
• The Executive Order may affect projects already in the permitting pipeline if required DEC approvals were pending or incomplete as of July 14, 2026.
• The Executive Order may not apply to projects proceeding solely through local permitting processes when no discretionary DEC approvals are required.
• The Executive Order raises important legal and practical questions regarding existing projects, project financing, permitting strategy, and the scope of executive authority.
• Companies with New York projects should promptly review their permitting status and development timelines.

For developers, investors, technology companies, utilities, lenders, and landowners, the Executive Order has immediate implications. It also signals a broader shift in how states are approaching the rapid expansion of AI infrastructure. While New York's action is unique today, it reflects issues that policymakers across the country are increasingly confronting as hyperscale (typically more than 100 MW) data center development accelerates.

What the Executive Order Does

Executive Order No. 62 directs the DEC to temporarily suspend processing certain discretionary environmental approvals relating to the construction or expansion of data centers that consume or can consume 50 megawatts of energy or more. Projects requiring discretionary DEC approvals, including certain wetlands, air, water, stormwater, or other environmental permits, may be subject to the Executive Order if those approvals were pending or incomplete as of July 14, 2026. The pause remains in effect until the Department of Public Service (DPS) completes a Generic Environmental Impact Statement (GEIS) assessing the potential environmental impacts of data center construction and operation in the state, "including energy demand, water use and quality, air quality, disproportionate impacts on disadvantaged communities, and noise levels." The Executive Order sets no deadline for DPS to complete the GEIS. However, the Executive Order also instructs DPS to assess impacts associated with the interconnection of data centers to the electric distribution network through an open DPS proceeding. In that proceeding, DPS must hold a technical conference by December 31, 2026, and publish a white paper discussing a comprehensive proposal for addressing issues associated with large-load connections by February 12, 2027.

Gov. Hochul also announced plans to pursue legislation addressing tax incentives and infrastructure cost allocation for hyperscale facilities as part of a broader review of New York's approach to AI infrastructure development during the 2027 session. New York's legislative sessions run from January through June of each year.

What the Executive Order Does Not Do

Despite headlines referring to a "statewide data center moratorium," the Executive Order is not a blanket prohibition on new data center construction. Rather, the Executive Order directs DEC to pause certain discretionary environmental approvals for data center projects consuming greater than 50 megawatts. As a result of this nuanced distinction, whether a project is affected by the Executive Order depends largely on its permitting pathway, complicating the evaluation of potential project risks. The Executive Order explicitly states that the pause on permitting does not apply to permits, approvals, licenses, or similar forms of permission from local governments. Given this caveat, development projects for data centers over 50 megawatts that are proceeding solely through local zoning, building permit, or other municipal approval processes may not be affected if no discretionary DEC approval is required. This distinction is likely to become one of the most important issues for developers evaluating projects currently in the pipeline.

Existing Projects Face Important Timing Questions

Projects whose relevant DEC approvals have already been determined to be complete, or projects that do not require discretionary DEC approvals, may stand on different footing. Developers should carefully review:

• whether all required state permits have already been issued;
• whether pending applications have been deemed complete under applicable procedures;
• whether remaining approvals are discretionary or ministerial; and
• whether future project changes could require additional environmental review.

Potential Legal Issues

Executive Order No. 62 also raises several unsettled legal questions, including:

• the scope of the governor's authority to suspend permit processing through executive action;
• whether the Executive Order effectively establishes new regulatory requirements without formal rulemaking;
• whether developers with existing approvals or substantial investments possess vested rights under New York law; and
• whether similarly situated projects could receive different treatment depending upon the status of their permit applications.

Whether these issues ultimately result in litigation remains uncertain. Nevertheless, they are likely to be closely monitored by both industry participants and state agencies as implementation proceeds.

Looking Ahead

Executive Order No. 62 represents a significant development in the regulation of AI infrastructure and underscores the growing attention that policymakers are giving to the infrastructure required to support artificial intelligence and other compute-intensive technologies.

For companies developing, financing, or operating data centers, the Executive Order serves as a reminder that successful projects increasingly require coordination across land use, environmental permitting, energy, technology transactions, commercial contracting, financing, and regulatory compliance. As states continue to evaluate the impact of hyperscale facilities on their electric systems and communities, companies should expect regulatory frameworks to evolve.

Davis Wright Tremaine's multidisciplinary data centers & digital infrastructure team advises developers, technology companies, investors, utilities, lenders, and infrastructure providers on every stage of the data center lifecycle, including site selection, land use, environmental permitting, energy procurement, commercial contracting, technology transactions, financing, and regulatory compliance. We will continue to monitor the implementation of Executive Order No. 62 and related legislative and regulatory developments and provide updates as additional guidance becomes available.

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Wendy Kearns is partner-in-charge of DWT's Seattle office and co-leader of the firm's technology industry group. Elaine Albrich is a partner in our Portland office and co-chair of the energy, natural resources & environmental practice group. Clayton Graham is a partner in our Seattle office and co-chair of the real property practice group. Madeline Marcellino is an associate in the firm's Portland office. For questions, please contact the authors or another member of our data centers & digital infrastructure team. To stay informed, sign up for our alerts.