Should NSA Pay a Tax on Energy its Utah Location Consumes?

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As recently as three weeks ago, the National Security Agency was protesting a bill seeking to tax their Utah data center citing a ‘lapse in communication’ as the primary issue surrounding the controversy.

According to St. Louis Tribune, the bill, which was passed by Utah’s legislature earlier this year, would tax the NSA’s Bluffdale data center for the millions of dollars of energy it is expected to consume – an act that would severely cripple the agency’s new upscale location.

Although the NSA is protesting the possible tax, a Utah attorney has stepped forward and said he informed the agency about HB325 but did not hear anything back until an official emailed Gov. Gary Herbert several weeks after Herbert had already signed the measure.

"We are quite concerned about this," wrote Harvey Davis, NSA director of installations and logistics, in the April 26 email. “The long and short of it is: Long-term stability in the utility rates was a major factor in Utah being selected as our site for our $1.5 billion construction at Camp Williams. HB325 runs counter to what we expected.”

The measure, which Herbert signed into effect April 1, benefits the Utah Military Installation Development Authority. It allows the entity, which was set up to put select military properties on the public tax bill, to collect a tax of up to 6 percent on Rocky Mountain Power electricity used by the Utah Data Center.

A 2012 Wired magazine article, citing former intelligence and NSA officials, said computers at the data center will collect electronic information — from emails to cell phone records to purchasing receipts — from all across the world, store it and look for threatening patterns. The article estimated the Utah Data Center would consume $40 million of electricity a year — a level of consumption at which the NSA would have to pay up to another $2.4 million annually to satisfy the tax HB325 could impose.

Sources: St. Louis Tribune, Wired, HB325