Governor Ned Lamont said he is open to building IT infrastructure in Connecticut, but there is no place for massive data centers in the state.
Connecticut already has smaller data centers located throughout the state. But Lamont said a major data center would demand a large amount of electricity, which he worries could raise electric rates for residents.
“One of these fifteen hundred-acre big AI data centers, they’re never going to be in Connecticut. We’re the wrong place for that,” Lamont said. “If someone wants to do an enterprise IT infrastructure in Cigna or someplace, within their building for their own offices, of course.”
Several years ago, the state offered a sales tax rebate for Cigna Healthcare to make improvements on its existing data center in Windsor. Lamont said sales tax exemptions were for IT infrastructure like server rooms, which are a much smaller scale than a massive data center.
In 2021, the state opened tax incentives to new data centers. Connecticut has since pulled back after getting few takers. The data center tax incentives were intended to support biotech and insurance companies in improving existing services and data centers.
Lamont’s comments were in response to Republican gubernatorial candidate Ryan Fazio. Fazio criticized Lamont and called for an end to the tax incentive program. In a press conference this week, Fazio said he doesn't want to ban data centers in Connecticut, but that he is opposed to tax breaks for those companies. Fazio said data centers can be major electricity consumers and could increase rates by driving up demand.
“Are they bringing their own fusion power, or hydroelectric? Then you maybe take a look at that, but right now the answer is no,” Lamont said.
Lamont said the state is not “well suited” for big data centers and it would lead to high electricity prices. However, he said proposals in which a developer offers to supply its own water and electrical power can be reviewed on a case-by-case basis. Lamont said he’d first want the Public Utilities Regulatory Authority (PURA) to review proposals. But ultimately it's up to the local community to decide.
“Towns have a right under planning and zoning to say, I don't think this is appropriate in my town,” Lamont said.
