Vermont's Data Center Bill Is Dead. Developers Weren't Lining Up to Build One Here Anyway
Vermont Governor Phil Scott's veto of H.727, a bill to regulate large-scale data centers, was sustained by the House, ending its legislative path for the session. While a separate state bill proposed a moratorium on AI data centers, Royalton voters locally approved their own five-year moratorium. The state generally faces low demand for large data center development, primarily due to high electricity costs and limited grid capacity.
Vermont Governor Phil Scott's veto of H.727, a bill designed to impose enhanced siting, environmental, and ratepayer-protection requirements on large data centers (20 MW or more), was upheld by the House, effectively killing the legislation for the session. Advocacy groups, including the Vermont Natural Resources Council, had pushed for an override.
A separate bill, S.205, proposed by Senator Becca White, sought to implement a moratorium on hyperscale AI data centers (above 100 MW) until July 2030, pending a Public Utility Commission study. Concurrently, Royalton voters independently approved a five-year municipal moratorium on AI and cryptocurrency data centers, despite no current proposals within their town.
Despite these legislative discussions, Vermont shows minimal demand for large-scale data center development. The state ranks last in the U.S. for data center development, with no active proposals. Kerrick Johnson, Commissioner of the Department of Public Service, and Green Mountain Power spokesperson Kristin Kelly confirmed few serious inquiries. A past project in St. Albans, ranging from 8 to 50 megawatts, collapsed due to an estimated $30 million in grid upgrade costs required for interconnection, highlighting the state's high electricity rates and limited grid capacity as primary deterrents.
The article also examined environmental concerns raised by H.727 proponents, such as increased electricity demand, water usage, PFAS contamination, and carbon emissions. It concluded that while these are valid national concerns, their applicability to Vermont is limited due to the state's low development demand, largely clean energy grid, and evolving cooling technologies. Governor Scott argued that existing regulatory frameworks are sufficient, while supporters maintained that new legislation is crucial to proactively address potential impacts. A federal executive order from December 2025, directing the Justice Department to challenge state AI laws, adds further uncertainty to the landscape for future state-level regulations.