House committee gathers broad stakeholder feedback on H727, the data-center bill; water, PUC contract clarity and transparency top concerns

Montpelier — On Wednesday, March 11, the House Energy & Digital Infrastructure Committee convened to take testimony on H727, a bill that would set rules for connecting large data centers to Vermont’s electric grid. Lawmakers heard from utilities, land-use authorities, conservation groups and developers about provisions on PUC‑approved service contracts, Act 250 triggers, water permits and energy‑efficiency protections.

The bill creates a process for utilities and data centers to enter a ‘‘large-load service equity contract’’ that the Public Utility Commission would review before approval, and it adds provisions intended to prevent costs from shifting to other ratepayers. Candace Morgan of Mountain Power told the committee the draft “does a really good job of establishing that” set of protections and welcomed language clarifying what the PUC should review in those contracts.

Why it matters: stakeholders said contracts will shape whether a data center imposes costs or risks on Vermont ratepayers and communities. Several witnesses urged tighter, clearer links between the contract-review process and the state land‑use review (Act 250) and water‑permit processes so that responsibilities do not duplicate or leave gaps.

What stakeholders said: Ben (industry representative) said Vermont “is going to be better off if a data center comes to the state with this bill than without it,” while urging the Legislature to consider whether some requirements belong in tariffs or rulemaking rather than private contracts. Peter Gil and Brook Dangle of the Land Use Review Board recommended that certain projects meeting the bill’s megawatt threshold be routed through Act 250 so site‑specific issues — noise, groundwater impacts, stormwater and soils — are addressed in a public permitting process.

Water and cooling systems drew sustained attention. Jared Carpenter of the Lake Champlain Committee explained the difference between closed‑ and open‑loop cooling and warned that open‑loop systems can require very large withdrawals; he noted a groundwater permitting trigger around 57,600 gallons in current practice and urged requiring groundwater and surface‑water permits where applicable. Witnesses also discussed using a 401‑style state review (analogous to a Clean Water Act section 401 certificate) to ensure comprehensive study of water and habitat impacts where federal permits or major withdrawals are implicated.

Regulatory scope and timing: multiple presenters and PUC staff recommended simplifying the bill’s checklist. Rick Favor of the Public Utility Commission suggested removing verbatim Act 248/250 siting criteria from the PUC’s contract‑approval findings (since Act 250 covers siting) while retaining greenhouse‑gas considerations; he and other witnesses proposed that the PUC be authorized to confirm the existence of relevant Act 250 and ANR permits rather than conducting duplicate site reviews. Committee members asked whether the Act 250 permit or the PUC contract approval should come first; witnesses said the processes could run in parallel but that approving a contract before site and environmental permits might be inefficient and recommended options that make approvals conditional on those permits.

Transparency and confidentiality: lawmakers pressed whether PUC‑approved contracts would be public. PUC and Public Service Department staff said contracts are generally public records, though limited contract terms may be withheld for cause; regulators and intervenors would have access to confidential evidence in the course of a regulatory review. Several participants urged drafting language to ensure regulators and appropriate intervenors can review any competitively sensitive terms while preserving legitimate confidentiality protections.

Energy efficiency and program participation: Efficiency Vermont’s managing director recommended that data centers be required to work with Efficiency Vermont and the relevant distribution utility on above‑code efficiency and demand‑management measures during design and operation. The bill as written would bar new data centers from participating in self‑managed efficiency programs (SEM/ESA) aimed at special industrial customers, a change Efficiency Vermont supported.

Decommissioning and financial assurance: lawmakers asked where decommissioning plans and financial assurances (bonds) would be required. Land‑use and PUC staff agreed that Act 250 is the customary venue for decommissioning plans for major developments, but several members asked the committee to require that the PUC check that Act 250 decommissioning and financial‑assurance conditions are in place as part of contract review.

Next steps: committee members indicated they expect edits on page six and seven to clarify the relationship between PUC contract approval and Act 250 and to tighten language on reporting, water protections, contract transparency and decommissioning. The committee said it would accept further input from the Environment Committee, the Agency of Natural Resources, the Public Utility Commission and Efficiency Vermont before a planned vote later in the week.

Representative Kathleen James opened the hearing and scheduled further work to reconcile overlapping jurisdictional language; no final votes on H727 were taken during this session.