Dec 22
2025
The many costs of proposed data center
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by Jim Heaney, editor of Investigative Post
There’s a lot to not like about data centers. They consume a lot of energy, and oftentimes water, and usually demand a lot of public subsidies. All to fuel the operations — and profits — of the likes of Amazon, Google, Apple and Meta.
J. Dale Shoemaker reported last week about a new proposal to build a massive data center at the STAMP industrial park in Genesee County, located midway between Buffalo and Rochester.
How massive?
There’s its physical size: 38 football fields.
And its energy consumption: 500 megawatts. That’s enough electricity to power practically every residence in Erie County.
Demand for electricity is approaching the supply available to power homes and businesses across the state. Energy hogs like the STAMP project further stress the supply stream and could very well drive up costs for everyday consumers.
New Yorkers are already paying more for their electricity than consumers in most states. According to the most-detailed analysis I came across, the average residential rate of 23.3 cents per kWh is substantially higher than the national average of 16.5 cents. We rank sixth-highest in the nation. The average commercial rate of 20.3 cents compares to 12.2 cents nationally.
Rates are expected to increase nationally, in part because of the electricity demands of artificial intelligence powered by data centers. Two years ago, data centers consumed 4 percent of the nation’s electricity; that share is expected to triple to 12 percent over the next three years. That’s the result of 3,000 more data centers on top of the 4,000 already operating.
Data centers also use copious amounts of water, concerning to some in the Great Lakes region.
The power consumption of the proposed data center at STAMP might also make it challenging to lure other large tenants to the industrial park. The data center, along with the power that’s been allocated to semiconductor parts maker Edwards Vacuum, leaves only 93 megawatts available to recruit other tenants. That’s not a good thing considering the state has sunk $100 million into readying the remote site for development.
Of course, not everyone thinks developing the site is a good idea, starting with the Tonawanda Seneca Nation, whose reservation is adjacent to STAMP. The data center would be close to the Nation’s Big Woods, which members use for hunting and growing traditional medicine plants. They worry the deer they hunt, for example, will be scarred off by the 24/7 humming of a data center.
Donate to support our nonprofit newsroomStream Data Centers, the firm behind the project, first proposed a data center at STAMP at the beginning of the year. The Nation sued the company and the Genesee County Economic Development Center for failing to complete a comprehensive environmental review, which prompted the company to withdraw its proposal.
The IDA voted Thursday to put itself in charge of a new environmental review, a move the Nation opposes. They’d rather the state Department of Environmental Conservation take the helm, arguing that the IDA stands to benefit financially from approving the project. Indeed, IDAs typically earn an administrative fee for projects it approves. In this case, that could run as high as $100 million.
Talk about a conflict of interest.
Stream Data’s first proposal involved $472 million in subsidies in the form of property, sales and mortgage tax abatements. Stream Data has yet to apply for a second round of subsidies, but has said the new facility would cost 60 percent more to build. That, coupled with the likelihood Stream Data will seek discounted hydropower from the New York Power Authority, means it’s not hard to imagine total subsidies north of three-quarters of a billion dollars.
All to create 120 jobs, at a subsidized cost of more than $6 million per job.
To put things further in perspective, the state’s nearly $1 billion investment to build Tesla a plant in South Buffalo called for the creation of 1,480 jobs at a cost per job of about $650,000, give or take. And many people thought that was a boondoggle.
The data center proposal is but the latest chapter in STAMP’s sorry history.
- A smart-growth analysis by the state determined STAMP was in an unsuitable site because of its remoteness.
- The IDA pressed ahead anyway but has struggled to recruit tenants.
- Work to provide necessary infrastructure resulted in toxic spills that led to a suspension of work and the revocation of permits.
All the while, Steven Hyde, the IDA’s president and CEO, drew an exorbitant salary that stood at $274,898 when he stepped down last year. He was the highest paid economic development official in the state, earning more than even the governor.
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