Committee reviews H.727’s data-center rules, focusing on water permits, Act 250 and PFAS

The Natural Resources & Energy committee on April 23 heard extended testimony on H.727, the bill that would set regulatory triggers and permitting requirements for large data centers. Witnesses and agency staff debated where technical water reviews should be handled, whether closed‑loop cooling or stricter groundwater rules should be required, and how to address PFAS chemicals in cooling systems.

Fred Baker of the Public Utility Commission said the PUC "is basically fine with the bill," noting the PUC worked with the House on Section 5 language that requires a regional renewable energy report. But much of the day’s discussion centered on Sections 3–6, which address energy triggers, permitting and decommissioning.

Why it matters: committee members and agency representatives warned that large data centers can use and affect substantial water and energy resources. Presenters said the bill’s 20‑megawatt threshold is the minimum used to define a "primary" data center in the draft and triggers additional review; they also said permitting language will determine whether local water users, fisheries and habitat get adequate protections.

Presenters described the water tradeoffs of cooling systems. A committee witness summarized commonly used estimates for a 20‑megawatt facility: "an open‑loop system... uses about 110,000,000 gallons of water a year" (roughly 300,000 gallons per day) and can lose about 80% to evaporation. He added that closed‑loop systems "capture the evaporation" and typically use 50–70% less water than open loop, but still can withdraw tens of thousands of gallons per day and have higher energy costs. Agency staff and other witnesses said those differences mean permitting should consider both water‑quantity and water‑quality impacts.

Jurisdictional split: ANR versus Act 250. Agency of Natural Resources representatives argued district commissions hearing Act 250 matters may lack the technical expertise to evaluate highly technical water‑quality and withdrawal questions and recommended ANR handle technical reviews through its water‑withdrawal and water‑quality permits. The presenters proposed bootstrapping ANR’s technical review requirements into the Act 250 process or attaching those requirements to an ANR permit so that technical analyses (thermal effects, effluent constituents and broader stormwater and erosion issues) are addressed by ANR.

Groundwater and surface‑water permit thresholds were debated. The bill draft includes a groundwater threshold of 57,600 gallons per day; presenters urged that "if they're withdrawing any amount of groundwater... there should be a groundwater permit." They also proposed additional studies for withdrawals over roughly 300,000 gallons per day to evaluate impacts on aquatic biota, habitat, impingement and streambank erosion.

PFAS and discharge limits. ANR staff told the committee that PFAS compounds are commonly present in cooling systems and that "there will be use of PFAS in the discharge." Because the state currently lacks a numeric PFAS water‑quality standard, one enforcement approach discussed was prohibiting PFAS discharges — effectively a zero‑discharge standard — coupled with mandatory disclosure of PFAS used, treatment (for example reverse osmosis) and monitoring to confirm effectiveness. ANR recommended using the broader state statutory definition for PFAS rather than the narrower list of compounds in the House draft; the agency pointed to an existing state PFAS definition in statute (transcript citation garbled) as the preferred reference.

Other technical concerns. Witnesses flagged thermal pollution—heated effluent that can alter fisheries and habitat—as a likely regulatory focus. They also urged attention to stormwater and non‑point sources of water pollution from large industrial sites, noting general industrial stormwater permits can be weak and may not capture all risks.

Energy and scale. A conservation group representative presented slides showing that a 20‑megawatt facility consumes substantially more electricity than many local utilities' customers and argued for a precautionary approach to protect grid reliability and climate goals. The witness said the committee should build backstops and redundancies into policy because the industry is evolving quickly.

Next steps. ANR was not present for all testimony and is scheduled to testify at a subsequent meeting; committee members asked for industry testimony on closed‑loop feasibility, additional technical detail on PFAS treatment and monitoring, and clarification on how ANR’s forthcoming surface‑water withdrawal rules would interact with H.727’s language. No formal motions or votes were taken during the session.

Ending: The committee agreed to continue the discussion with ANR and industry witnesses at a follow‑up meeting and to refine permit‑attachment and definition language before finalizing recommendations.