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WATERFORD – Dominion Energy will host a more than 1.5 million square foot data center complex on its Millstone Nuclear Power Station property if the town approves an agreement where developer NE Edge would pay $231 million over 30 years instead of property taxes.
The proposal is the latest plan for a data center in eastern Connecticut after state lawmakers in 2021 exempted large data centers from local property taxes if they can agree on a fee to pay the municipality instead.
Data center developers have said the warehouse-sized networks of computers and servers are sorely needed in the Northeast to lower latency – or delay – in accessing information from cloud networks. Several data center proposals in the area have faced fierce opposition from local residents concerned with noise and the impact of development, including NE Edge proposals in Bozrah and Groton.
In a letter to the town, NE Edge Manager George McLaughlin III described plans for two data center buildings: one with two 568,000 square foot stories, and another with two 214,000 square foot stories – a total of more than 1.5 million square feet for cloud and data storage servers.
For the larger building, NE Edge is proposing to pay Waterford $3.5 million a year for 30 years increasing 2 percent every year, plus a $10 million payment when the building receives its building permit, and five $6 million payments made every five years through 25 years.
For the smaller building, NE Edge is proposing to pay $1,312,500 a year increasing 2 percent every year, plus a $3.75 million payment after receiving a building permit, and five $2.25 million payments made every five years.
For a 30-year agreement like the one proposed between NE Edge and Waterford, the developer has to invest at least $400 million in the project to qualify for the tax break under state law. McLauglin said the project would create nearly 2,000 construction jobs and 150-200 permanent jobs.
First Selectman Rob Brule said in a release that the project would bring long term benefits to Waterford.
“We are encouraged to see our largest taxpayer reinvest in our community,” Brule said. “This particular collaboration will undoubtedly benefit every taxpayer in the Town of Waterford, not only today, but for generations to come.”
In a statement, State Sen. Martha Marx, D-New London, whose district includes Waterford, praised the proposed deal for bringing new business to the town.
“This project will provide long-term benefits for Waterford and its neighbors, infusing new opportunities for business growth into the area,” Marx said.
So far, the developers have targeted towns with municipal electric utilities to avoid paying high prices to Eversource and United Illuminating for the massive amounts of electricity the data centers use. In Waterford, the proposed data centers would draw power directly from the nuclear plant, according to a news release from the town.
“Dominion Energy is exploring this opportunity with NE Edge to help respond to a critical data infrastructure need in our state,” Millstone Site Vice President Michael O’Connor said in the release. “The data center’s need to find a suitable site and the availability of space on Millstone Power Station property make this a potentially beneficial partnership for Dominion Energy.”
McLaughlin said the project would give Dominion two “substantial new energy customers” with a reliable base load that could help keep the plant open if its license is extended.
The Board of Selectmen and Representative Town Meeting will consider the proposed agreement between Waterford and NE Edge over the next several weeks, according to the release.
If the agreement is approved, the project will go through planning and design and seek local, state and federal approval for its plans over the next year, according to the release.
Editor’s note: This story has been updated.