Vermont Governor Vetoes Data Center Bill H.727
Vermont Governor Phil Scott vetoed data center bill H.727, despite initial support, due to controversial Senate amendments. These included an "energy transformation payment" criticized as "extortion" and a provision allowing water pollution. Vermonters for a Clean Environment, involved in the bill's development, supported the veto, advocating for comprehensive and responsible data center regulation in the state.
Alison Despathy, community and environmental health director for Vermonters for a Clean Environment, criticized the Vermont Senate's amendments to data center bill H.727, which ultimately led to Governor Phil Scott's veto. The organization initially participated in developing the bill to ensure comprehensive regulation for data centers, citing widespread concerns about their power and water consumption, environmental impacts, and noise pollution across the country. Despathy highlighted the need for Vermont to proactively address the inevitable demand for data centers driven by AI and data-generating technologies.
The bill, H.727, passed the House with strong protections for water, ratepayers, and the electrical grid, to be regulated jointly by the Public Utility Commission and Act 250. However, in the Senate, two major amendments were added. First, an "energy transformation payment" of approximately $6 million per year was introduced, which TJ Poor of the Vermont Department of Public Service called "pay to play" and stated would signal a negative message to prospective businesses. Second, language was added that would allow data centers to pollute if they obtained a surface water withdrawal permit, a provision the Land Use Review Board also flagged as problematic.
Despathy argued that these "extremist and bad policy" amendments, particularly the "extortion" payment and the water pollution clause, justified the governor's veto. She blamed Senator Anne Watson for not seeking a compromise to salvage the bill. Despathy concluded by advocating for a fresh legislative approach in the next session to combine Act 250 protections with new regulations to create a specific, responsible policy for data centers in Vermont, as the issue is ongoing.