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Connecticut May Study Data Center Power Use

The Legislature’s Energy and Technology Committee approved a bill requiring scrutiny of a proposed data center — and any data center proposed in the state that would bypass the electrical grid. The bill heads now to the full state Senate.

A data center with a worker standing in front of one of the machines.
(TNS) — A bill passed Thursday by the state Legislature's Energy and Technology Committee would require the potential impact of NE Edge's proposed data center at Millstone Power Station to be studied by ISO New England, the grid manager for five states in New England.

The proposed legislation, introduced by Rep. Norm Needleman, D-Essex, would apply not only to NE Edge's proposed data center in Waterford, but to any data center proposed in the state that would bypass the electrical grid.

Committee members voted 12-3 in favor of the bill, sending it to the Senate for further consideration.

If the bill were passed, any data center that would be placed "behind-the-meter," meaning it would draw power directly from an energy-producing source such as a power plant, wind farm or solar park, would have to submit to an "impact study" from ISO New England and the local utility company where the data center would reside, Needleman said.

"If the backup is going to come from the grid, (we have) to make sure that we have adequate power to do that," he said. "We want to make sure if we're taking 300 megawatts, whatever wattage we're taking off a power plant and then backing it up with the rest of the grid, it's sort of like an additive amount of potential loss of electricity."

A state law enacted in 2021 created incentives for data centers to be built in Connecticut, and enabled the state Department of Economic and Community Development to sign long-term tax incentive agreements with developers that pledge to invest millions of dollars in the state.

As a result, several towns in the state, including Waterford, began hosting discussions with data center developers. NE Edge last year signed a host fee agreement with the town in which it promised to pay a fee of $231 million over 30 years instead of property taxes.

Per the agreement, NE Edge would build two two-story data center buildings on the Millstone property, enabling it to buy power directly from Millstone owner Dominion Energy Nuclear Connecticut, reducing the cost of power consumed by the data centers.

The NE Edge project is in limbo after a January decision by the state Siting Council to deny Dominion a boundary change it would need to proceed with the project.

Needleman said at the time the incentive bill was proposed, legislators had not fully considered the impact of data centers.

Rep. Holly Cheeseman, R- East Lyme, who supported the 2021 law, now wants data centers' potential impact on energy consumption to be studied. She voted with the majority Thursday.

"I have real concerns both about the current proposal in my neck of the woods," she said, referring to NE Edge, "but also the unanticipated consequences of adding yet another huge source of demand in our grid."

Rep. Paul Ackert, R-Coventry, said he will continue to vote against the bill, which he believes is contrary to the one that enticed data centers to build in the state.

"We look forward to looking to entice companies to come here and give them a nice little financial credit, then we're like whoa, whoa, whoa, wait a minute. Timeout. Maybe don't put those investment dollars here," he said.

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