Vermont Governor Vetoes Data Center Bill H.727 Over Extortion Fee and Pollution Concerns
Vermont Governor Scott vetoed data center bill H.727, citing problematic Senate amendments that included an "Energy Transformation Payment" and provisions allowing water pollution. Environmental advocates, who initially helped develop the bill, ultimately deemed the veto justified due to these extreme changes, despite their efforts to establish responsible data center regulations.
Alison Despathy, community and environmental health director for Vermonters for a Clean Environment, criticized Governor Scott's veto of H.727, a data center bill, despite her group's initial involvement in its development. Despathy acknowledged the governor's justification, attributing the bill's demise to "extremism and bad policy" introduced by the Senate, specifically Senator Anne Watson, chair of the Senate Natural Resources and Energy Committee.
The problematic amendments included an "Energy Transformation Payment," described as an "extortion fee" by TJ Poor, director of planning at the Department of Public Service, who testified against it. Poor argued the $6 million annual payment, intended for emissions reductions, would deter businesses and send a negative message to prospective industries in Vermont. Additionally, the Senate added language that would "enable water pollution" by allowing data centers an unfair advantage if they received permits to withdraw surface water, a provision also flagged by the Land-use Review Board.
Despathy argued that while the bill passed the House with strong protections for water, ratepayers, and the electrical grid, the Senate's changes made a veto the only responsible outcome. She hopes for new, specific data center policies in the next legislative session, leveraging Act 250 protections and other necessary regulations, given the ongoing demand for digital expansion.