3.7.24 Legislature seeks data center study Concerns raised over delays

Legislature seeks data center study; Concerns raised over delays
S.B. 299 would evaluate grid impacts of ‘behind-the-meter’
hyperscale data centers in development at Millstone Power Station
site
by Erica E. PhillipsMarch 7, 2024 @ 9:12 pm
NE Edge founder Thomas Quinn testified against S.B. 299 during a
public hearing before the Legislature's Energy and Technology
Committee on March 7, 2024. CREDIT: ERICA E. PHILLIPS / CT
MIRROR
Connecticut leaders are weighing the stress that massive data
centers could place on the region’s power grid against the
economic opportunities they offer, as rapid advancements in
technology accelerate demand for data processing capacity. 
A proposal to study how large-scale data centers might affect the
reliability of the state’s electric grid is drawing opposition from
those who say it would delay critical development.
The General Assembly’s Energy and Technology Committee heard
public testimony Thursday on the proposal. The legislation would
require the Public Utilities Regulatory Authority to conduct the
evaluation with the Department of Energy and Environmental
Protection, the Office of Consumer Counsel and ISO-New England,
the nonprofit corporation that manages the region’s power grid. It
calls for the effort to be completed by July 1 of this year.
Leaders with DEEP and the state’s Department of Economic and
Community Development took opposing stances on the measure.
“The demand and need for data centers is expanding significantly to
keep pace with the needs of AI expansion and may constitute
approximately 8% of U.S. energy consumption by 2030,” DEEP

Commissioner Katie Dykes told the committee, expressing her
agency’s support for the bill, S.B. 299. 
“It’s really important to have the right framework to ensure that
there’s equitable deployment of this kind of demand that doesn’t
shift any costs — or increase costs — to other ratepayers and is
harmonized with the need to maintain reliability of the grid,” Dykes
said.
In written testimony, DECD Commissioner Dan O’Keefe urged the
committee to shift the focus of the study.
“Instead of studying the impact of data centers on the grid, the state
[should] instead study ways to support data centers on our grid to
leverage the greatest economic benefit they enable,” he wrote.
Fostering more data center development is critical, O’Keefe argued.
“We cannot afford to have them built first elsewhere, as these new
computing technologies are important for our economic future,” he
wrote. “It is in the states and communities where these data centers
are ultimately built that the greatest economic benefits will accrue.
We need that to happen here, in CT, and there is a limited window
of opportunity in which to act.”
Three years ago, the legislature moved with urgency to pass a bill
creating tax incentives to encourage data center development in the
state. The program waives sales and property taxes for 20 years on
data centers that invest at least $200 million in the state — or just
$50 million if the facility is located within a state-designated
enterprise zone. The tax exemptions may be extended up to 30
years with a larger investment.