Vermont transmission officials warn federal proposal to allow transmission-level data‑center hookups could erode state rate oversight

VELCO officials told the House Energy and Digital Infrastructure Committee on Feb. 12 that a proposed federal approach to allow data centers to interconnect at the transmission level could remove a key layer of state oversight over rates and renewable‑energy obligations even as states would retain siting authority.

"We do not have retail customers in the same way that a distribution utility would have," said Shana Loisel of Vermont Electric Power Company (VELCO), explaining that VELCO is a transmission utility subject to Federal Energy Regulatory Commission rules. She added, "To date, there are no current requests, for data center interconnection to Velco's system." The testimony framed H.727 and related questions about where data centers would buy power and how costs would be allocated.

The witnesses, including VELCO general counsel Mark Grama, said transmission service is federally regulated while distribution service and retail rates are largely under state law and Public Utility Commission (PUC) oversight. Grama described a possible federal rulemaking prompted by the U.S. Department of Energy that would require regional transmission operators such as ISO…