DPS to House: existing rules can protect ratepayers but technical conference and clearer large‑load rules recommended

Commissioner Carrick Johnson and TJ Poor of the Vermont Department of Public Service (DPS) told the House Energy & Digital Infrastructure Committee that the state has regulatory tools to review and mitigate data‑center impacts but should tighten protections and build a record before projects arrive.

"We have sufficient regulatory mechanisms to ensure protection of Vermont ratepayers right now," Commissioner Johnson said, while adding that the mechanisms "absolutely could be strengthened, and likely they should." DPS staff emphasized early coordination across New England, transparency in utility contracting, and clear cost‑allocation rules so ratepayers are not left holding long‑term transmission or reliability costs.

Johnson told the committee he was not aware of any active data‑center proposal in Vermont at the time of testimony. He outlined what major hyperscaler developers typically seek — inexpensive energy, reliable grid access, strong fiber, and predictable permitting — and described how industry public commitments (he cited Google’s capacity‑commitment framework and Microsoft’s community‑first AI plan) have evolved but require scrutiny and verification.

DPS recommended the committee authorize or request a PUC‑led technical conference to build a shared record on data centers and large loads. Johnson said a technical conference would bring utilities, ISO New England, state agencies (including Agency of Natural Resources for water and environmental impacts), developers and other stakeholders together to define information needs and possible statutory/regulatory changes.

Specific policy ideas DPS raised include:

- requiring utilities and large loads to adopt a large‑load service‑equity contract that explicitly addresses cost causation and protections for other ratepayers; - clarifying how Act 250 and Title 30 (PUC authority) criteria should be applied to large data‑center projects (including water, aesthetics, and municipal impacts); - considering stranded‑cost protections or collateral requirements if a large user causes infrastructure investments and later fails to pay; - requiring reporting on project costs and related business costs (change orders and direct business expenses) to improve transparency; and - pursuing regional coordination (NESCO/NESCOE, NEPOOL, and ISO New England) so transmission and capacity planning include potential large loads in reliability studies.

DPS staff also warned about state incentive risks, noting Massachusetts and Connecticut have passed incentive bills that relieved some costs for data‑center construction and that energy regulators in those states were later surprised by aspects of the legislation. Johnson recommended interagency communication with economic development officials before incentives are enacted.

On a committee question about a moratorium, DPS said it preferred building improved rules and a public record through a technical conference to an immediate prohibition: "we would prefer not to go that way," Johnson said, arguing that targeted regulatory clarifications and regional collaboration are the better path.

What happens next: DPS offered to provide written comments, documentation from other states, and to participate in a technical conference to help the committee refine statutory language and regulatory steps.