Fred V. Carstensen’s March 22 “Opinion: CT SB299—afraid of the future, data centers and AI” ignores the legislative events and legitimate concerns that led to SB-299 being introduced in the first place.
For starters, House Bill 6514 (HB-6514), a law passed in 2021, incentivizes data center development. Under HB-6514, any data center built or rehabilitated in Connecticut does not pay property or sales and use tax for the life of the facility, typically 20 to 30 years. Instead, it is required to pay the host municipality a Payment In Lieu Of Taxes (PILOT), an often absurdly low fee negotiated with the host municipality.
The State of Connecticut relies on local property taxes to fund municipal budgets. Why sell needy municipalities short by way of the HB-6514 host fee agreement (a.k.a PILOT)? Pitting lawyered-up, wealthy developers representing multinational businesses against small time municipalities isn’t anyone but the developer’s idea of a good proposition.
When State Sen. Mae Flexer tried to introduce amendment LCO No. 4286, requiring the Department of Energy and Environmental Protection (DEEP) to review every data center proposal, it was ignored in favor of hurriedly passing HB-6514 as emergency legislation. Had Flexer’s sensible amendment been included in 2021, there would be no need for SB-299.
[RELATED: Legislature seeks data center study; Concerns raised over delays]
Not surprisingly, Thomas Quinn, CEO of NE Edge, LLC (NE Edge) the developer of a proposed hyper scale data center in Waterford, is now lobbying hard against SB-299, that would study how large-scale data centers might affect the reliability of the state’s electric grid. Developer Quinn has never actually completed construction of a data center, no less one with direct connections to two nuclear reactors. Incredibly, Carstensen does not want to adopt SB-299 that would vet such a project.
NE Edge is trying to build a 1.5 million square foot hyper scale data center with direct connections to Dominion nuclear reactors 2 and 3. Its size and proposed direct connection will thwart desirable competition. NE Edge seeks to siphon 300 megawatts (300MW) or, fifteen percent (15%) of affordable nuclear production leaving current and prospective developers to pay grid-supply prices everywhere else in Connecticut. It’s a glaring problem that raises questions about antitrust.
Siphoning 15% of nuclear power production to power Quinn’s Waterford data center will create grid scarcity. Instead of selling full capacity to the grid wholesale market, Dominion will only be offering 85% of daily capacity. That shortage will handicap wholesale electricity markets run by Independent System Operator-New England (ISO-New England).
Siphoning affordable “base” nuclear production normally sent to the grid all but guarantees that ever more expensive market-setting resources will automatically be paid to Dominion by way of ISO-New England’s uniform clearing price auction.
Grid scarcity caused by Quinn’s direct connection scheme will all but guarantee that Dominion shareholders will reap greater profits at the expense of Connecticut’s residential, commercial, and industrial electric customers.
[RELATED: Proposed data center would get power from Millstone nuclear plant]
As Quinn states that ISO-New England has extra capacity to backfill that loss, he conveniently leaves out that it will do so using a much more expensive mix of resources, typically natural gas, the price of which will quickly be passed through to Connecticut ratepayers. Quinn’s lawyer, Bill McCoy, continues to “greenwash” the project with nuclear power. However, the large increase of natural gas used to produce electricity will significantly increase pollution.
When both reactors go down simultaneously, as happened for several weeks in 2023, what will keep Quinn’s hyper-scale data centers running, and who supplies that electricity? The rest of us? Neither Dominion, nor NE Edge, LLC have provided Connecticut residents with that answer.
The ISO-New England/Eversource circuit with Millstone is dedicated, providing the bare minimum needed to safely run cooling pumps and peripheral equipment during shutdowns, but not to run a commercial data center. Where then will the energy come from 24/7/365 at 300MW constant for weeks on end?
As Connecticut state statutes dictate the procedures followed for the billing and collection of taxes and the important record keeping involved, how is that same standard ensured during negotiations now happening between the developer and the Connecticut Department of Economic and Community Development?
To ignore the adoption of SB299 imperils our wellbeing, economy, and the environment. Minus all of those things what good is a hyper scale data center built for bitcoin mining or AI?
We, the concerned citizens of Waterford and East Lyme (CCWEL) do not fear data centers nor AI. We fear loss of energy security by way of unchecked tech development that will unnecessarily harm Connecticut residents and the environment.
In the case of NE Edge, LLC’s Waterford proposal, we fear egregious undermining of local property tax, grid scarcity, antitrust concerns, large increases to energy bills, and significant environmental damage at the hands of a developer with no proven track record of success. Sites.google.com/view/ccwel-resources/home
Bryan Sayles is the Founder of the Concerned Citizens of Waterford and East Lyme (CCWEL).