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Sept. 2, 2024

Businesses join outcry over spike in CT electric rates; here’s how they are responding

David Krechevsky

CKS Packaging Inc. is a national plastic container manufacturer with a production facility in Naugatuck.

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Do you think CT should offer more generous incentives to promote data center development?
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Connecticut has tried to attract more data centers by creating tax incentives through the state Department of Economic and Community Development.

In 2021, the legislature enacted the Connecticut Data Center Tax Incentive Program, which can waive sales and use, and property taxes for 20 years for data centers that invest at least $200 million ($50 million if located within a state-designated enterprise zone).

The tax exemptions could be extended up to 30 years for investments that exceed $400 million.

So far, Bloomfield-based health insurer Cigna Group is the only company to apply for benefits under the program. 

Some states offer additional incentives to promote data center growth, including New York’s ReCharge NY, which subsidizes power for businesses.

Data center operators say Connecticut’s high costs of electricity, real estate and wages make the cost of running a data center less lucrative than in nearby states, even with the current incentives in place.

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