Molitor signs GOP letter on data center power agreements
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Assemblyman Andrew Molitor is among the Republicans in the state Assembly members signing on to a letter asking the New York Power Authority for more transparency about power subsidies for data centers.
Assemblyman Ed Ra, R-Garden City and Assembly minority leader, recently sent a letter to Justin Driscoll, president and CEO of the New York Power Authority, asking for more information about discounted electricity for data centers through NYPA’s ReCharge program. Ra said data centers in several areas of the state have received low-cost power from NYPA, but NYPA hasn’t disclosed the rates paid by those facilities or the dollar value of the discount.
“This prevents the Legislature and New York taxpayers from evaluating the cost and effectiveness of a publicly controlled economic development benefit” Ra wrote in his letter. “We recognize that the use of financial incentives can be a useful tool in attracting new businesses and facilitating economic growth. In highly technical arrangements, sensitive information should be protected. However, given the growing public interest in New York’s energy policy, cost concerns and the future reliability of the grid, we encourage NYPA to provide greater clarity on the financial commitments made to data centers.”
According to data analyzed by Reinvent Albany, the Rockland County Industrial Development Agency (IDA) and New York Power Authority (NYPA) committed at least $321 million in sales tax exemptions and power subsidies to five data center sites in Rockland County since 2013. In return for these generous handouts of taxpayer funds, the corporations building the data centers -- which are among the world's wealthiest and include Wall Street giants like JP Morgan -- will create or keep the equivalent of 298 full-time equivalent jobs. The average NY household is paying about nineteen times more for electricity than most data centers in Rockland County. According to data from NY State's energy agency, NYSERDA, residential customers paid $244 per megawatt-hour (MWh), and NYPA preferred power customers - including Rockland data centers - $12.88 per MWh.
Legislation (A.10852/S.9182) was introduced in the Assembly in April, sponsored by Assemblywoman Anna Kelles, D-Ithaca, and Sen. Rachel May, D-Syracuse. It would no longer allow ReCharge NY allocations for data centers along with caps on other subsidies, require the state DEC be the lead agency for projects that meet certain electricity use standards and require a full environmental impact statement and consultation for projects near federally recognized Indian nations. The legislation has attracted several Democratic Party co-sponsors, but no Republican support.
"As electricity demand grows and infrastructure investment becomes more expensive, the state must be more deliberate about how public subsidies are used. Incentives should support projects that deliver broad and durable economic value, not simply reward scale or energy consumption," Kelles and May wrote in their legislative justification.
The lack of Republican support is, in part, because the minority party in both houses of the state Legislature has its own plan for electricity subsidies for data centers. Assemblyman Scott Gray, R-Watertown, has introduced legislation (A.11419) that would create a procedure for utilities and high-demand customers to negotiate electric service agreements by requiring those agreements to be negotiated on a case-by-case basis and then approved by the state Public Service Commission. They would be required to be structured so costs are paid by high-use customers rather than ordinary ratepayers.
“To be clear, our conference has staunchly opposed misguided energy policies that have undermined New York’s energy sector,” Ra wrote. “The state’s rush toward an all-electric future has done more harm than good – for consumers, for businesses and for energy capacity. The debate about data centers and their impacts on communities should be part of any conversation on energy policy. However, what can’t be debated is that the amount of electricity being used by data centers is a growing concern for ratepayers and grid reliability. NYPA’s commitment to transparency should reflect the same level of concern.”