Data Center at STAMP gives enormous benefits to an ultra-rich tech company

Editor:

Of the seven companies in the world that are worth more than $1 trillion, six are American tech firms. They are fantastically wealthy and profitable, and they all require data processing centers that use enormous amounts of electricity.

Consider the proposed data center known as Project Double Reed at the STAMP site in Genesee County.  It is a nominal 250 megawatt installation that will be built and operated by a firm that will then lease the center to a suitable tenant, presumably a multi-billion or trillion dollar tech company.

Assuming an average usage of 65% of nominal capacity, the center will use around 1,424,000 MW-h of electrical energy in a year. By contrast, the total electrical usage for Genesee County in 2024 was 416,000 MW-h. So the proposed data center will use about 3.5 times as much electricity as the entire rest of the county.  In fact, the data center will use roughly as much electricity as the combined total annual usage for Genesee, Orleans, Wyoming, and Livingston counties!

Governor Hochul, working with the NYS Power Authority, has proposed that STAMP be offered cheap “hydropower” electric rates.  The Power Authority has indicated that the grid can handle the Double Reed load without the need for additional generating capacity. That’s good, since building additional capacity would result in a sharp spike in customer rates.

But something is missing here. If we give multi-billion dollar corporations a big price break on a significant chunk of electricity (in addition to giving them multi-hundred million dollar tax subsidies), wouldn’t that mean that the rest of the ratepayers would face increased rates?  It sure seems possible.

Much has been written about this by reputable sources at Harvard and MIT, detailing how utility ratepayers are paying for Big Tech’s power. The conclusion is that the current data center funding strategies are devolving into a race to the bottom, with government entities giving more and more costly incentives for smaller and smaller public benefits, and with the data centers reaping big rewards.

It is, in essence, a transfer of wealth from ordinary citizens to extraordinarily rich corporations. Currently Double Reed and the GCEDC (which stands to collect tens of millions of dollars in fees) are the big winners. The rest of us are losers.

Please consider making your voice known to your elected representatives on this important issue.

David Giacherio

Kent