NYPA Approves Low-Cost Hydropower To Attract Verizon Data Center To Niagara County: 145 new permanent jobs and $1.1 billion in capital investments would be linked to hydro allocations

Mike Saltzman
(914) 390-8181

October 26, 2010


LEWISTON—The New York Power Authority (NYPA) Board of Trustees today approved allocations of low-cost hydropower from the Niagara Power Project for the possible construction by Verizon Communications of a major data center in the Town of Somerset in Niagara County to handle the company’s billing and client services processing.  

Two allocations of hydropower, totaling 25 megawatts (MW), would be provided to Verizon in return for the telecommunication giant’s committing to build the data center at a Lake Road site in Somerset that is under consideration. Under NYPA’s hydropower proposal, Verizon would receive the power in return for creating 145 new jobs within four years of the data center’s operation and investing nearly $1.126 billion over the initial four years.  Another benefit for Western New York employment would be up to 500 construction jobs for building the data center. 

“This allocation to Verizon demonstrates how the strategic use of low-cost hydropower has been the engine of the local economy in Western New York, and specifically, Niagara County,” Kessel said. “Today’s action by NYPA Board exemplifies how aggressive we’ve been in working with state and local economic development agencies to attract premier high-tech companies to Western New York to create jobs and help turn around the region’s economy. Only last month, Yahoo! officially opened its new data center in Lockport thanks in large part to our allocation of hydropower for that facility, and we would do the same for Verizon in the efforts to make Western New York a magnet for various types of job-producing high-tech industries.”

“We’re pleased by the serious attention Verizon has given to Niagara County in the company’s consideration of a location for a new data center,” Michael J. Townsend, NYPA chairman, said. “This validates what we said last year when Governor Paterson announced the Power Authority’s allocation of hydropower for the Yahoo! data center in Lockport.  Each time a high-profile company like Yahoo! is drawn to Western New York, it builds momentum for attracting other high-tech companies, as they become further aware of the region’s advantages, including low-cost hydropower, a business-friendly environment and a hard-working, educated work force.  There is a true synergy about this for creating an enhanced effect for the area economy.”

“The possibility of a Verizon data center coming to Western New York is an exciting opportunity that we’re eager to make happen through assignment of hydropower,” said D. Patrick Curley, a NYPA trustee and resident of Orchard Park. “This is another example of the Power Authority’s use of low-cost hydropower from the Niagara project as a catalyst for the region’s economy. It’s a proven economic development tool and we’re working hard to maximize the value it brings to the area.”

“Today’s allocation of low-cost power is an essential component needed for Verizon to select Niagara County as the location of a new data center,” said Empire State Development Chairman & CEO Dennis M. Mullen.  “New York competes on a daily basis with every state in the country and countries around the world for global companies who are looking to expand their operations.  It’s imperative that state and local economic development agencies work to provide the best possible resources that complement our existing assets, including our top-notch workforce, world-class university system, access to water and central location in the Northeastern United States.  I’d like to thank Richie Kessel and the NYPA Board of Trustees for approving this critical incentive needed for Verizon to build a new data center, which would result in a more than $1.1 billion investment and the creation of 145 new high-paying jobs in Niagara County.”

The plan that Verizon is considering in connection with the Somerset site would involve its purchase of 150 acres of land and construction of three two-story buildings equipped with electrical and mechanical infrastructure, computers and associated equipment.  There also would be two emergency backup power stations on the site, an administration building and a conference center.

If the project moved forward, the data center could be in operation by early 2012, with the facility reaching its full size in 2018. Verizon, which is headquartered in New York City, has 250 data centers across the U.S. and throughout the world, including 21 in New York. 

The 25 MW of NYPA hydropower for the new Verizon data center would be provided over a 15-year contract term and be evenly drawn from two blocks of Niagara industrial power known as Replacement Power (RP) and Expansion Power (EP).  RP and EP, which account for more than one-third of the Niagara project’s firm generating capacity, are reserved under state law for businesses within a 30-mile radius of the Niagara project, or for businesses in Chautauqua County.  The statutory criteria for allocations are identical for the two programs, centering on bringing about new jobs and capital investments. More than 100 of the Buffalo-Niagara region’s foremost businesses, employing tens of thousands of people, receive this power.   

Niagara hydropower is provided at rates typically 75 percent less than market prices.


About NYPA:

■ The New York Power Authority uses no tax money or state credit. It finances its operations through the sale of bonds and revenues earned in large part through sales of electricity. ■ NYPA is a leader in promoting energy efficiency, new energy technologies and electric transportation initiatives. ■ It is the nation's largest state public power organization, with 17 generating facilities in various parts of New York State and more than 1,400 circuit-miles of transmission lines. ■ Approximately 80 percent of the electricity it produces is clean renewable hydropower.  Its lower-cost power production and electricity purchases support hundreds of thousands of jobs throughout the state. ■For more information, www.nypa.gov.


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