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Witnesses urge stronger limits for data centers on peak demand, water use and emissions
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Summary
VPIRG and ANR witnesses told the committee H-7-27 should strengthen protections for grid capacity, require new renewables or equivalent offsets for large data-center loads, and ensure Act 250 and water-permit triggers close regulatory gaps; examples of backup-generator use and sudden load reductions were raised as cautionary evidence.
Lawmakers heard extended testimony April 24 on H-7-27, a bill aimed at governing large data-center projects and large electric loads. Ben Walsh of the Vermont Public Interest Research Group urged a precautionary approach, asking the committee to prioritize grid protections, near-zero climate pollution from new centers and strong oversight.
Walsh pointed to national examples where data centers sharply curtailed operations or relied on on-site fossil-fuel backup generation rather than grid interconnection. "I don't think we can count on the current regulatory framework ... when we're talking about an industry that just approaches things very differently and has more money than god to do what they want," Walsh said, citing instances in Tennessee where backup jet-engine-style generators were used as primary power.
Agency of Natural Resources officials said the state’s existing environmental statutes and Act 250 provide broad review, but recommended explicitly triggering Act 250 for data centers to avoid potential gaps. Billy Coster, director of planning policy at ANR, and Evan Burton, director of the watershed management division, urged caution around duplicative permit language and stressed that groundwater and surface-water withdrawal statutes already include thresholds and drought provisions.
ANR noted the existing groundwater-permit trigger of 57,600 gallons per day and the agency’s forthcoming surface-water withdrawal rulemaking, and asked the committee to avoid creating parallel or redundant permit streams that could complicate enforcement. Committee members said they were concerned about a timing gap if rules are not finalized before a proposed data center arrives and discussed sunset or interim provisions to bridge that window.
Witnesses and members also discussed renewable-power options for large loads. Walsh recommended that data centers either procure newly built renewables or otherwise ensure the new load does not increase net regional fossil-fuel generation; he said some models would require 100% new renewables or equivalent regional commitments to avoid increasing carbon pollution.
Lawmakers did not take action on H-7-27 during this hearing but directed staff to continue drafting language that addresses: minimum contract lengths or exit fees to prevent stranded utility costs, explicit Act 250 triggers, clearer water-withdrawal thresholds tied to existing statute, and stronger contractual language to limit increases in peak demand.
