Vermont Data Center Bill Vetoed Amid Concerns Over 'Extortion Payment' and Water Pollution Language
Vermont Governor Scott vetoed H.727, a bill intended to regulate large data centers (over 20MW), despite initial efforts to ensure environmental, water, and grid protections. The veto was justified by a controversial 'Energy Transformation Payment' and language in the Senate's version that critics argued would enable water pollution and deter businesses. The bill aimed to establish regulatory oversight through the Public Utility Commission and Act 250.
Vermont Governor Scott vetoed H.727, a bill designed to regulate large data centers exceeding 20MW, despite initial legislative efforts aimed at ensuring electric service reliability and affordability for Vermonters, while preventing adverse environmental impacts. The bill, which passed the House with strong support, sought to establish joint jurisdiction for data center regulation under the Public Utility Commission (PUC) and Act 250, addressing concerns about power consumption, water usage, and siting.
However, the Senate introduced two contentious amendments: an 'Energy Transformation Payment' of approximately $6 million per year and language that critics argued would enable water pollution. TJ Poor, Director of Planning at the Department of Public Service, strongly opposed the payment, labeling it an 'extortion fee' that would discourage businesses from locating in Vermont. Senator Watson, Chair of the Senate Natural Resources and Energy Committee, was criticized for refusing to address these issues, which ultimately led to the Department's opposition.
Environmental protections related to water, including groundwater, surface water, and cooling water, as well as concerns about PFAS contamination, were initially well-addressed in the House version. The bill also proposed that data centers, not ratepayers, would fund necessary grid upgrades. Despite these positive initial developments, the problematic Senate amendments led to Governor Scott's veto, who stated that existing Vermont laws like Act 250 and PUC oversight already provide substantial regulatory authority. The author, Alison Despathy of Vermonters for a Clean Environment, supported the veto, emphasizing the need for responsible legislation in future sessions.