21
Analysis of the Economic Impact of Project NML Data Centers on Connecticut
Analysis of the Economic Impact of Project NML Data Centers on Connecticut
PG. 2
Table of Contents
Executive Summary ...................................................... 1
Data Center Industry Background ............................... 3
Overview of the Data Center Industry ...................................................... 3
Industry Growth ............................................................................................... 3
General Economic Impact of Data Centers ............................................ 5
Data Center Tax Incentives ........................................... 7
Overview of Data Center Tax Incentives Nationwide .......................... 7
Case Study ....................................................................................................... 8
Expected Impact of Data Centers in Connecticut ..... 10
Geographic Factors ..................................................................................... 10
Construction Activity .................................................................................... 11
Data Center Employment ........................................................................... 12
Project NML Data Centers .......................................... 10
Overview ......................................................................................................... 14
Jobs Impact Study be CERC .................................................................... 15
PG. 1
EXECUTIVE SUMMARY
Data centers are facilities used to house computer systems and associated
components, such as telecommunications and storage systems. Data centers require a
significant investment in sophisticated designs and engineering, as well as state-of-the-
art mechanical systems for HVAC and power generators. Due to the need to expand
capacity, advances in computer equipment, and software and security upgrades, data
centers invest in computing equipment a minimum of every three years.
Thirty states offer incentives that are designed to attract data centers to locate in their
state, with Illinois poised to become the 31st. Connecticut would be the first state in
New England to offer a data center tax incentive. Tax incentives can have a significant
impact on a market’s cost competitiveness.
The data center industry has experienced a supply shortage in recent years; data
centers are filling faster than operators can create space. Data center development
offers opportunities for both urban and rural communities. For instance, data centers in
metropolitan areas generally employ adaptive re-use of land or buildings. Rural areas
have benefited from the rapid growth of the data center industry as large companies
such as Google, Microsoft, Yahoo!, and Intuit have invested billions of dollars into mega
data centers in rural communities.
Many factors make Connecticut an attractive and even unique location for the
development of the proposed data center project. Connecticut is home to, or in
proximity of, major U.S. industries such as finance, technology, insurance, healthcare
and defense. In addition, Connecticut’s proximity to both New York City and Boston,
highly skilled and productive workforce, strong education system, and innovation will
be a draw for data centers to be located in Connecticut.
According to a report produced by the U.S. Chamber of Commerce, a data center of
165,000 ft2 requires an initial investment of $45 million in building construction and $157
million in servers and other computer equipment. Building a data center of this size with
a construction phase of 18 – 24 months is estimated to create 1,688 local jobs, $77.7
million in wages, $234.5 million in local economic activities, and 9.9 million in state and
local taxes. Once a data center is constructed, the U.S. Chamber of Commerce
estimates that a large data center will generate 157 local jobs earning $7.8 million in
wages, create $32.5 million in local and economic activities, and generate $1.1 million in
state and local taxes.
PG. 2
Project NML involves three tracts of undeveloped land in three separate Connecticut
municipalities with the capacity to build 43 data centers plus a power generation
facility and electric switchyard at each location. The data centers would be built over
several phases.
Project NML will provide economic benefits to the State of Connecticut, including a
steady flow of increased tax revenues, job creation and the opportunity for enhanced
infrastructure, enabling even greater development opportunities.
Project NML will:
create construction jobs over several phases, including ongoing maintenance
and expansion;
provide direct employment once the data center is built, including software
engineers, networking professionals, server managers, facilities managers, and
security guards;
provide indirect employment in the form of jobs created within the data center’s
supplier network to service the new facilities; and
provide induced employment in the form increased employment in the consumer
sector as a result of the spending of wages in the local economy.
Connecticut Economic Resource Center, Inc. (“CERC”) conducted an economic impact
study of Project NML on the State of Connecticut. CERC was provided with budgeted
expenditures and master plans for two of the three locations, with an expectation of 29
buildings. CERC estimates that over the more than 40 years it will take to construct the
29 buildings with the proposed project timeline, the estimated impact of construction
activities is estimated to be over $35 billion. The full impact from this construction will
support over 3,545 jobs per year (or almost 149,000 job years in total). Ongoing
operations and maintenance will generate additional impacts in Connecticut.
The balance of this report will (i) provide an overview of the data center industry and the
economic impact of data centers; (ii) discuss tax incentives common to attract data
center development, and their economic impact; (iii) discuss the broad potential
economic impact of data center development in Connecticut; and (iv) provide an
economic analysis of the impact that Project NML will have on Connecticut, with a focus
specifically on job creation.
Disclaimer: It should be noted that this analysis and results should not be interpreted as a guarantee of the outcomes or success of
a data center development project. Its intention is to serve as a tool to help understand the potential impacts of a proposed data
center development project. Potential impacts will vary by project, location and that location’s tax structure.
PG. 3
DATA CENTER INDUSTRY BACKGROUND
Overview of the Data Center Industry
Data centers are facilities that contain servers and networking computers for data
processing, data storage, and communications. There are three types of data centers:
1. Co-Location – Typically owned and operated by a third party company that has
server space they lease to companies while sharing common infrastructure and
facility management. Some facilities have owner/operators that lease space in the
facility and the tenant furnishes their own electronic and computer equipment.
Other facilities rent space to a tenant on the servers and utilize paid staff of the co-
location center.
2. Enterprise – Data centers that house the IT infrastructure of an individual company
that require reliable power, security and control.
3. Mega data centers – Facilities that are built and owned by large technology
companies such as Amazon, Facebook, Google, Microsoft, Yahoo! and support
large cloud and data infrastructure.
There are a number of publicly traded data centers, as well as Real Estate Investment
Trusts (“REITS”) that are focused on developing data centers.
Industry Growth
Gartner predicts that by 2025, 80% of enterprises will migrate entirely away from on-
premises data centers with the current trend of moving workloads to colocation, hosting
and the cloud.1
CBRE, the commercial real estate service and investment company, is bullish on the outlook for data center demand, driven by “ever-increasing data consumption, storage, compute power and the rapid evolution of technology – from self-driving vehicles, to networked homes, to advancements in mobile, interconnectivity and content delivery.”2
The continual move toward online operations has boosted demand for server space. As a
result, data center revenue increased an annualized 6.5% to $13.5 billion over the five
years through 2018, including growth of 7.9% in 2018. The data center industry has
1 https://www.gartner.com/en/newsroom/press-releases/2018-12-04-gartner-identifies-the-top-10-trends-impacting-infras[7/24/2019 11:30:04 AM] 2 CBRE Research, “2018 U.S. Real Estate Market Outlook: Data Centers.”
PG. 4
experienced a supply shortage in recent years; data centers are filling faster than
operators can create space. As a result, over the next five years, industry revenue is
projected to increase an annualized 6.5%, driven by an increasing number of businesses
that require data center services.3
The six publicly traded REITS that acquire, develop and manage data centers have
realized compound annual revenue growth of 20% during the 2014 through 2018 period.
The chart below depicts the rapid revenue growth of these six companies.
3 IBISWorld Industry Report OD5899, “Colocation Facilities in the United States,” December 2018.
5,000.0
7,000.0
9,000.0
11,000.0
13,000.0
15,000.0
17,000.0
19,000.0
21,000.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Colocation Industry Revenue (Historic and Projected)2010‐2024
Revenue (U.S. Segment) (in $ millions)
PG. 5
General Economic Impact of Data Centers
North American data center investment volume totaled more than $12 billion in 2018.4 Data center development offers opportunities for both urban and rural communities. For instance, data centers in metropolitan areas generally employ adaptive re-use of land or buildings. Rural areas have benefited from the rapid growth of the data center industry as large companies such as Google, Microsoft, Yahoo, and Intuit have invested billions of dollars into mega data centers in rural communities.5
The table below demonstrate the tax revenues that may be generated at the state and local level in Connecticut through capital investment in data centers:
State Level Local Level Sales taxes on construction materials Share of sales tax money collected
Sales/use taxes on equipment purchases Real estate taxes on a newly constructed or renovatebuilding
Sales taxes or franchise fees on power consumption
Personal property taxes on computer servers anfurniture
4 CBRE Research, “North America Data Center Trends Report,” H2 2018. 5 Tracy Hyatt Bosman, “How Data Centers Benefit Communities,” Fall 2013.
‐
1,000
2,000
3,000
4,000
5,000
6,000
2014 2015 2016 2017 2018
Revenue Growth of 6 Publicly Traded Data Center Companies(in $ millions)
Equinix CoreSite CyrusOne Digital Realty Zayo Group QTS Realty
PG. 6
Increased sales tax revenue generated from newly created jobs
Personal income taxes from construction and permanent data center jobs
Unemployment taxes from construction and permanent data center jobs
Virginia is often referenced as the gold standard for data center development. Data
centers make a large contribution to Virginia’s economy. In 2016, the data center industry
was responsible for directly and indirectly supporting approximately 43,275 jobs, $3.2
billion in labor income, and $10.2 billion in economic output. In 2016, data centers made
$2.6 billion in capital investments in Virginia, supporting approximately 4,617 jobs, $254.3
million in labor income, and $670.0 million in economic output in the state’s construction
industry. Virginia has expanded the state’s existing 2008 data center sales and use-tax
exemption on computer equipment.6
6 Northern Virginia Technology Council, “The Economic and Fiscal Contribution that Data Centers Make to Virginia,” February 2018.
PG. 7
DATA CENTER TAX INCENTIVES
Overview of Data Center Tax Incentives Nationwide
Thirty states offer incentives that are designed to attract data centers to locate in their
state. Illinois is poised to become the 31st state to offer a tax incentive as a $45 billion
capital spending bill is awaiting the signature of the state’s governor. Within the $45 billion
capital spending bill is a measure that exempts qualifying data centers from having to pay
state and local sales tax on equipment in the data center facilities.7
STATES OFFERING DATA CENTER INCENTIVES8
Connecticut would be the first state in New England to offer a data center tax incentive.
New York provides a sales tax exemption for equipment used by Internet data centers, so
7 https://www.datacenterknowledge.com/business/illinois-offering-tax-incentives-boost-chicago-data-center-market 8 Mangum Economics, “Potential Impact of a Data Center Incentive in Illinois,” prepared for The Illinois Chamber of Commerce Foundation, November 2018.
PG. 8
an incentive by Connecticut could be an equalizer for a company considering locating in
either New York or Connecticut.
Common data center incentives include:
Tax exemptions, refundable credits or cash grants for data centers investing
more than a certain dollar amount and creating a certain number of jobs
Sales tax exemption, abatement or refunds for purchases of data center
equipment
Property tax abatements or exemptions
General economic development programs
Infrastructure grants
According to a report by CBRE, tax incentives can have a significant impact on a
market’s cost competitiveness. For instance, the cost competitiveness of Des Moines,
Iowa improves from a “moderate cost market” to a “low cost market” as a result of tax
incentives that provide a total savings of $32.5 million over a 10-year period, reducing
taxes’ share of the total cost from 16.0% to 4.3%.9
Case Study – Tax Benefits Attract Data Centers
Washington State had tax benefits for colocation facilities in the early 2000’s. These
major tax benefits allowed Washington to witness a boom in mission-critical projects in
2006 and 2007.
In 2007, Washington repealed the state tax incentives for data centers, which resulted in
slower data center development in the state. Seattle area based Microsoft referenced
the repeal of the benefits when they decided to move the Windows Azure cloud computing
service out of Washington. Microsoft and Yahoo! soon stopped the construction on data
center campuses in Quincy, WA while the tax benefits were being debated.10
With threats by Microsoft to expand in Oregon, Washington’s data center incentives were
re-enacted, which resulted in $2 billion in new private investments. However, in June of
2011, the incentives lapsed, which stopped the growth in Washington and drove a $1
billion investment in nearby Oregon, along with other key players, such as California
9 CBRE Research, “Site Selection for Enterprise Data Centers,” 2015. 10 https://www.datacenterknowledge.com/archives/2010/02/01/group-pushes-for-change-in-washington-state
PG. 9
based Adobe and Apple who announced they would be building data centers in Oregon
as well. California, like Washington, does not offer data center tax incentives.
After failure to re-enact the tax incentives in 2014, Microsoft built a new $1.1billion data
center in West Des Moines, Iowa. Microsoft cited the failure to authorize the tax incentives
in Washington as a major part of their decision in building the new data center in Iowa
rather than Washington.11
11 Mangum Economics, “Potential Impact of a Data Center Incentive in Illinois,” prepared for The Illinois Chamber of Commerce Foundation, November 2018.
PG. 10
EXPECTED IMPACT OF DATA CENTERS IN CONNECTICUT
Geographic Factors
Many factors make Connecticut an attractive and even unique location for the
development of the proposed data center project.
Connecticut is home to, or in proximity of, major U.S. industries such as finance,
technology, insurance, healthcare and defense. Connecticut’s defense industry, led
by the “Big 3” of Electric Boat, Pratt & Whitney and Sikorsky, received $15 billion in
defense funding in 2017, seventh most in the country.12
According to the 2018 Doing Business in Connecticut report, the top 5 reasons to
grow a business in Connecticut include:
1. Strategic Location. The state is equidistant to both New York and Boston
giving Connecticut businesses proximity to both customers and prospects.
According to the report one-third of the entire U.S. economy is within 500
miles. (Other data indicates that Connecticut is also within eight hours of 85%
of Canada’s population and 60% of its GDP.13)
2. Highly Skilled Talent. Connecticut has nearly 50% more adults with
bachelor’s degrees or above than the national average. The state also ranks
number three for adults with master’s degrees and number six for science and
engineering doctorates.
3. Exceptionally Productive Workforce. If Connecticut was a country, it would
rank as the sixth most productive economy in the world, ahead of Germany,
Japan and Hong Kong.
4. A Great Education System. Connecticut’s education system excels from
kindergarten through grad school. U.S News and World Report ranked the
state’s K-12 education number four in the country and the state is home to
higher education institutions such as Yale, UConn and the U.S. Coast Guard
Academy, among others.
5. Passion for Innovation. The state has long been a location for significant
innovation. The state currently ranks number four in the country for private
12 https://www.defense.gov/explore/story/Article/1789129/which-state-ranks-highest-in-military-spending/ 13 Statistics Canada, 2016, via MetroHartford.
PG. 11
R&D per capita and benefits from state-funded programs like the
Manufacturing Investment Fund.14
Infosys, a global leader in next generation digital services, recognized the
advantages cited above when it opened its latest Technology and Innovation Hub in
Hartford. The Hub will serve as Infosys’ global Hub for its InsurTech and HealthTech
efforts.15 In picking Connecticut, Infosys specifically identified the state’s diverse
economy, world-renowned academic institutions and highly skilled local work force.16
When Cervalis announced its opening of a 168,000 square foot data center in
Fairfield County, Connecticut in 2014, the Chief Executive Officer noted that
Connecticut’s proximity to New York City was a contributing factor to choosing the
location. In addition, the Connecticut location enabled Cervalis to cater to the state’s
many financial services companies. Further, many Connecticut companies benefit
from having a data center located in Connecticut to allow for businesses continuity
through access to dedicated work area recovery during natural disasters.17
Construction Activity
Data centers are very capital intensive. Industry operators must build or acquire
facilities, power and utilities infrastructure, telecommunications and internet
infrastructure and redundancy capabilities. In addition, data centers must provide
reliable power supply and internet connections. As a result, industry operators need to
acquire fiber optic cables and multi-amperage power connections. Additionally, this
industry needs to provide redundant or backup power and internet connections. Other
infrastructure required includes security cameras, alarm systems and data recovery
systems.18
According to a report produced by the U.S. Chamber of Commerce, a data center of
165,000 ft2 requires an initial investment of $45 million in building construction and $157
million in servers and other computer equipment. Building a data center of this size with
a construction phase of 18 – 24 months is estimated to create 1,688 local jobs, $77.7
million in wages, $234.5 million in local economic activities, and 9.9 million in state and
14 https://nebusinessmedia.uberflip.com/i/992084-doing-business-in-connecticut-2018/5? 15 https://www.infosys.com/newsroom/press-releases/Pages/opens-technology-innovation-hub-ct.aspx 16 https://www.infosys.com/american-innovation/Pages/ct.aspx 17 https://www.datacenterknowledge.com/archives/2014/02/03/cervalis-opens-new-connecticut-data-center. Cervalis was acquired by CyrusOne in 2015. 18 IBISWorld Industry Report OD5899, “Colocation Facilities in the United States,” December 2018.
PG. 12
local taxes.19 Technology improvements are driving data center construction costs
down to $5 million per MW (from a standard of $7 million).20
Even after data centers are built, there is still a need for regular upgrades and
expansions to meet growing demand and to incorporate the latest technologies. For
example, Google’s data center campuses employ more than 1,100 construction workers
across its six campuses each year for upgrades and expansions.21
The impact of the Great Recession, which technically lasted from December 2007
through June 2009, is still being felt in the construction industry in Connecticut. In
January 2018, private-sector employment in Connecticut surpassed its pre-recession
peak of 1,458,200. Although the state has recovered the total number of jobs, the
Construction sector has lost 7,091 total jobs from 2008 through 2017. There is
momentum in this sector however, since between October 2017 and October 2018, the
construction sector picked up 3,800 jobs.22 New development in data centers may help
keep the momentum going in the construction sector.
Data Center Employment
Data centers require skilled workers for installation and tech support services. Once a
data center is constructed, a typical operation employs software engineers, networking
professionals, server managers, facilities managers, and security guards. A U.S.
Chamber of Commerce study on data centers estimates that a large data center will
generate 157 local jobs earning $7.8 million in wages, create $32.5 million in local and
economic activities, and generate $1.1 million in state and local taxes.23
A study by Oxford Economics estimates that Google’s data center activities further
support an external supply chain that employs nearly 3,500 additional workers. Each
direct Google data center job is found to support an additional 4.9 jobs nationwide.
When economic activity from all channels is considered, the jobs multiplier attributable
to Google at the state level ranges from 3.3 in South Carolina to 4.6 in Georgia.
Industries with new jobs supported by the Google data centers include (i) Trade,
19 U.S. Chamber of Commerce, “Data Centers: Jobs and Opportunities in Communities Nationwide,” June 2017. 20 Washington Department of Commerce, “State of the Data Center Industry: An Analysis of Washington’s Competitiveness In This Fast-Growing High-Tech Field,” January 2018. 21 Oxford Economics, “Google Data Centers: Economic Impact and Community Benefit,” April 2018. 22 Connecticut Office of Legislative Research, “Issue Brief: Employment Changes in Connecticut Since the Recession,” 2018-R-0290, December 7, 2018. 23 U.S. Chamber of Commerce, “Data Centers: Jobs and Opportunities in Communities Nationwide,” June 2017.
PG. 13
transport & Utilities; (ii) Professional & Business Services; and (iii) Leisure &
Hospitality.24
According to a report by 7x24 Exchange International, a facility operated by a third party
in the 175,000 to 250,000 square foot range may have 20 – 25 employees. A case
study referenced in the report estimated 22 employees to operate a 230,000 square foot
data center, and an additional 143 employees indirect or induced jobs.25 In addition,
there is a growing tendency of companies to collocate IT staff, sales staff and other
employees at the data centers.26
Data center employees also earn higher than average salaries. According to a 2018
survey on salaries earned by data center employees, half of respondents earned annual
salaries that were $100,000 or greater.27 Based on Bureau of Labor Statistics data, the
average annual salary in Connecticut is $60,780.
The chart below provides a projection for the number of employees employed to
manage and operate a data center around the clock.
Data center employees earn an average wage of $70,927, compared to the average
annual salary of $60,780 in Connecticut.28
24 Oxford Economics, “Google Data Centers: Economic Impact and Community Benefit,” April 2018. 25 Indirect jobs are defined as jobs created within the data center’s supplier network to service the new facility. Induced jobs are defined as employment in the consumer sector as a result of the spending of wages in the local economy to pay for groceries, clothes, entertainment, haircuts, etc. 26 Tracy Hyatt Bosman, “How Data Centers Benefit Communities,” 7x24 Exchange International, Fall 2013. 27 2018 Technology Salary Survey – Data Center conducted by Informa Engage, Data Center Knowledge, IT Pro Today, Channel Futures. 28 U.S. Bureau of Labor Statistics, “May 2018 State Occupational Employment and Wage Estimates.”
Employment Projections
Job Title # of Employees Average Wage
Security Guards 8 34,950$
Salesperson 2 70,600$
Engineers 2 105,980$
Custodian 1 34,360$
Data Center Manager 1 147,440$
Data Center Technicians & Network Administrators 8 93,230$
TOTAL JOBS / Weighted Average Wage 22 70,927$
PG. 14
PROJECT NML DATA CENTERS
Overview
Project NML involves three tracts of undeveloped land in three separate Connecticut
municipalities with the capacity to build 43 data centers plus a power generation facility
and electric switchyard at each location. The data centers would be built over several
phases. Building a data center that is 165,000 ft2 in size has a typical construction
phase of 18 – 24 months.29
N Location M Location L Location
Number of Potential Data
Centers
10 26 7
Total Building Footprint 1,332,031± SF2 3,014,063± SF2 931,426± SF2
Total IT Data 288 MW 704 MW 224 MW
Total Power Requirement 405 MW 985 MW 315 MW
Total Campus Area 15,039,574± SF2 18,132,591± SF2 10,036,855± SF2
In addition to the data centers, the N location also has capacity for a two story office
area of 301,776 SF2 and a two story residential area of 155,826 SF2.
The demographics of the three subject municipalities are provided below:30
Combined Population 74,570
Combined Number of Construction Workers 976
Weighted Average Unemployment Rate 5.5%
29 U.S. Chamber of Commerce, “Data Centers: Jobs and Opportunities in Communities Nationwide,” June 2017. 30 Connecticut Economic Resource Center Town ProfilesTM
PG. 15
Project NML will provide economic benefits to these communities and the State of
Connecticut, including a steady flow of increased tax revenues, job creation and the
opportunity for enhanced infrastructure, enabling even greater development
opportunities. The next section will discuss the jobs impact from Project NML.
Jobs Impact Study by CERC
Connecticut Economic Resource Center, Inc. (“CERC”) conducted an economic impact
study of Project NML on the State of Connecticut. CERC with budgeted expenditures
and master plans for two of the three locations associated with Project NML. Within
these two sites, there is an expectation that 29 buildings will be built; 28 of these
buildings will be 32MW data centers, and one will be a 16MW data center.
Over the more than 40 years it will take to construct the 29 buildings with the proposed
project timeline, the estimated impact of construction activities is estimated to be over
$35 billion. The full impact from this construction will support over 3,545 jobs per year
(or almost 149,000 job years in total). Ongoing operations and maintenance will
generate additional impacts on the state.
Table 1 and Table 2 below show the impacts on the State of Connecticut from the
construction of the data center buildings and sites. The impacts of the construction
activity include:
The construction of one 32MW data center would generate a total estimated impact on output in the State of Connecticut of $312 million, while construction of a 16MW data center would generate a total impact on output estimated at $171 million. This per unit construction is expected to take 18 months.
o These total impacts will be the result of construction expenditures for the data center minus an estimated share of the direct economic activity that occurs out of state. These direct effects are estimated to be $188 million for construction of a 32MW building and $103 million for construction of a 16MW building.
o There will be additional impacts on the state as other companies in Connecticut increase their production to make the commodities required for construction. These indirect effects on output are estimated to be $42 million for construction of a 32MW building and $23 million for construction of a 16MW building.
o The spending from labor income earned by employees working on this project and employees of the indirectly affected establishments will ripple through the state’s economy and will generate $82 million in
PG. 16
output from the construction of a 32MW data center. The induced effect from the construction of the 16MW data center is estimated to be $45 million.
Value added produced from construction of a 32MW data center is estimated to be $180 million, while value added from construction of a 16MW data center would be $99 million. Construction of the data centers will also generate value added, which is the increase in total state output less the cost of the intermediate inputs used and represents the wealth created in the state’s economy due to spending on the project.
Total labor income from construction on a data center building is estimated to be $139 million for a 32MW data center and $77 million for a 16MW data center. Labor income is a component of value added and represents employee compensation, both wages and benefits, and proprietor’s income.
Construction of a 32MW data center is expected to produce an estimated 2,065 jobs over the 18-month project timeline (or over 1,030 jobs per year), while construction of a 16MW data center is expected to produce more than 1,130 jobs over the 18 months. These jobs include both full- and part-time positions. Over half of the jobs for each size data center will be hired directly, with the remainder generated by indirect or induced effects.
Table 1: Total Impacts on Connecticut from Construction of One 32MW Data Center
Output
(Mil 2019$)
Value
Added (Mil
Labor
Income (Mil
Employment
(Jobs per
Total $312 $180 $139 2,065
Direct $188 $102 $91 1,338
Indirect $42 $26 $17 212
Induced $82 $52 $31 514
*Note: Includes budgeted expenditures specific to construction of 32MW data center only. Source: World Edge Data Center; IMPLAN 2017 model for Connecticut; CERC calculations.
PG. 17
Table 2: Total Impacts on Connecticut from Construction of One 16MW Data Center
Output
(Mil 2019$)
Value
Added (Mil
Labor
Income (Mil
Employment
(Jobs per
Total $171 $99 $77 1,136
Direct $103 $56 $50 736
Indirect $23 $14 $10 117
Induced $45 $29 $17 283
Source: World Edge Data Center; IMPLAN 2017 model for Connecticut; CERC calculations.
Additional construction to provide supportive infrastructure that is not specific to the
32MW or 16MW data center buildings will be required. Most of these expenditures are
expected to occur during the first eighteen months of construction, as the first two data
centers are built, although some will recur in future years (for example, to increase utility
capacity as more data centers come online). The impacts for the first 18 months of
construction are shown in Table 3.
Table 3: Total Impacts on Connecticut from Additional Construction Activities, First
Eighteen Months of Construction
Output(Mil2019$)
ValueAdded(Mil2019$)
LaborIncome(Mil2019$)
Employment(Jobs)
Total $127 $71 $41 406
Direct $72 $36 $20 162
Indirect $32 $20 $12 92
Induced $24 $15 $9 152
Once each data center is operational, there will be regular impacts on the economy of
the State of Connecticut from security and other facility employees as well as periodic
maintenance of the computers, servers, and other related equipment as well as of the
supplemental utilities. The annual impacts resulting from ongoing operations and
maintenance for individual 32MW and 16MW buildings are shown in Table 4 and Table
5, respectively.
PG. 18
Table 4: Total Annual Impacts on Connecticut from Operations and Maintenance of One
32MW Data Center
Output
(Mil 2019$)
Value
Added (Mil
Labor
Income (Mil
Employmen
t (Jobs)
Total $42 $25 $15 140
Direct $7 $5 $5 40
Indirect $26 $14 $7 44
Induced $9 $6 $3 56
Source: World Edge Data Center; IMPLAN 2017 model for Connecticut; CERC calculations.
Table 5: Total Annual Impacts on Connecticut from Operations and Maintenance of One
16MW Data Center
Output
(Mil 2019$)
Value
Added (Mil
Labor
Income (Mil
Employment
(Jobs per
Total $24 $14 $9 84
Direct $5 $3 $3 27
Indirect $14 $8 $4 24
Induced $5 $3 $2 33
Source: World Edge Data Center; IMPLAN 2017 model for Connecticut; CERC calculations.
CERC was provided planned expenditure data for the first 11.5 years of operations at
the two sites. During this time, it is estimated that eight 32MW data centers and one
16MW data center will be constructed and become operational. The total impacts from
construction and operations during this time are presented in Table 6. The plan to build
29 buildings on the two sites assumes 18 months for construction of each building with
all construction occurring sequentially (rather than concurrently), and would result in
total construction taking more than 40 years to completion. Total impacts for
construction of these 29 buildings as well as operations during two time periods are also
presented in Table 6. The impacts from operations at the sites are presented for 43
years, which allows for one year of operations after the planned construction is
completed. However, it should be noted that these impacts are likely to be affected by
technology, policy, and other environment changes in the next four decades.
PG. 19
Table 6: Total Impacts on Connecticut from Construction and Operations for First 11.5
Years and 43 Years of Data Center Activity
Output
(Mil 2019$)
Value
Added (Mil
2019$)
Labor Income
(Mil 2019$)
Employment
(Jobs per
Year)
Total – 11.5 Years $4,130 $2,420 $1,688 1,876
Construction $2,592 $1,493 $1,133 1,428
Operations $1,538 $927 $555 449
Total – 43 Years $35,776 $21,277 $13,626 3,463
Construction $9,754 $5,614 $4,277 1,447
Operations $26,022 $15,664 $9,349 2,016
