Hartford Business Journal

18 HARTFORDBUSINESS.COM | SEPTEMBER 21, 2026 Reduce operating costs and increase productivity. We make it easy with efficiency measures to lower energy use resulting in savings. Go to BusinessEnergyCT.com to get your no-cost facility assessment. We're your energy efficiency Partner. Unlock significant incentives and energy savings for your business with a no-cost facility assessment. Reduce energy use and cost. Paid for by a charge on customer energy bills. PROUD SPONSORS OF BROUGHT TO YOU BY FCIK004HBJ Connecticut lawmakers considered two related bills during the 2026 legislative session. One would have established rules for connecting large electricity users and power generation located at or near the same site. The other would have eliminated the state's data center tax incentives. Neither became law. Cigna is the only company that has used the incentive program. The Bloomfield-based health insurer saved an estimated $17 million in state sales taxes on $386 million in improvements to its Windsor data center through July 1, 2025, according to the Department of Economic and Community Development. Republican gubernatorial candidate Ryan Fazio has called for repealing the incentives, although he has not advo- cated banning data centers. He also has said the facilities should provide or contract for enough electricity to meet their needs. Even if those policy questions are resolved, Connecticut's high electricity costs raise a separate question over whether a hyperscale data center would be financially viable here. John Matheson, president of Colchester-based ReNew Developers, which builds on-site power systems for industrial and technology customers, said he does not expect Connecticut to attract the industry's largest facilities. Commercial electricity rates in the state range from 21 to 23 cents per kilowatt-hour, compared with a national average of about 13 cents, he said. Instead, Matheson sees an oppor- tunity for smaller, distributed facilities known as edge data centers. Located closer to the customers they serve, they can be roughly the size of a CVS or Best Buy and typically use 4 to 10 megawatts. Matheson said those facilities can generate much of their own electricity and use closed-loop cooling systems that consume relatively little water. Local trade-offs Meanwhile, with no statewide framework governing hyperscale data center development, municipalities are adopting their own guidelines and restrictions. Some towns, including Morris and West Haven, have recently established temporary moratoriums. New Haven is considering a 12-month moratorium on data center development while a working group studies the industry's potential effects and recommends local regulations. For towns willing to host the facilities, the primary economic benefit is tax revenue because data centers typically create relatively few permanent jobs. Naugatuck is marketing 35 acres of a former Uniroyal Chemical site for a data center that would use roughly 100 megawatts, but Mayor N. Warren "Pete" Hess III has established strict conditions. Hess said any project must generate at least $14 million a year for the borough, operate without grid power under normal conditions and take no water from the Naugatuck River. "If those standards cannot be met, there will be no project," Hess said. One Connecticut town, Wallingford, believes it has an advantage in attracting a data center because it operates its own electric utility. Wallingford Electric's commercial and industrial rates are 30% to 40% below Eversource's, said Don Crouch, the town's economic development specialist. "With our own utility, it definitely gives us a leg up," Crouch said. Wallingford changed its zoning regula- tions in 2024 to allow data centers in its Watershed Interchange District. Charter Development Group has been exploring a site near transmission lines off Williams Road for a possible data center but has not filed a formal application. Three other data center developers contacted the town over the past year to conduct due diligence, Crouch said. None has filed an application. "It'll be interesting to see 'under study' versus 'ready to build,'" Crouch said. "The study could find that it's not viable." Connecticut lawmakers have debated how to regulate hyperscale data centers amid concerns about their potential impact on the electric grid and customer costs. HBJ AI-generated Image Under Study Continued from page 17

• Cover