House committee backs bill to regulate large AI data centers, sets PUC and Act 250 checks

A House committee on March 20 voted to report H.727 favorably after hearing that the bill would place new state-level checks on large "AI" data centers, including Public Utility Commission (PUC) approval of large-load contracts, Act 250 land-use review and Agency of Natural Resources (ANR) wastewater monitoring.

Maria Royal, who presented the bill, said the proposal targets highly intensive facilities used for AI training and inference and sets a clear applicability threshold. "The threshold for when this bill would apply ... is 20 megawatts of power," Royal told the committee, adding that a 20-megawatt installation typically occupies 10–40 acres, could draw energy roughly equivalent to supply for 15,000–20,000 households and may use about "500,000 gallons of water a day," a quantity she compared to the needs of roughly 1,500 households.

Why it matters: Committee members and agency staff flagged three interlocking concerns—electric-system impacts, water-use and wastewater discharge, and site remediation when facilities close. Royal said the bill would require data centers to enter "large-load service equity contracts" with utilities that include explicit cost-allocation, collateral to mitigate stranded-cost risk, minimum purchase commitments and other terms intended to protect existing ratepayers. She said the PUC must find that any contract "promotes the general good of the state" and does not harm power-system reliability before approving it.

James Duffy of the Joint Fiscal Office summarized the fiscal implications and implementation burden, saying H.727 contains no appropriation and "is expected to have a minimal impact on state revenue." Duffy and agency representatives told the committee that the PUC, Public Service Department, ANR and the Land Use Review Board anticipate absorbing the bill’s duties with existing staff, though ANR said reviewing PFAS monitoring data could meaningfully increase its workload depending on project volume.

The bill would add qualifying data centers to the Act 250 definition of "development," potentially subjecting larger projects to the state’s land-use review and permitting process; connection to Act 250 could also trigger application fees (a statutory maximum for construction permits was cited) and additional permit review steps. Royal and staff noted the bill does not impose new tax rates but would require contracts to collect gross-receipts taxes and energy-efficiency charges where applicable.

Royal described Section 4’s wastewater provisions as requiring certain data centers to submit wastewater monitoring plans to ANR, including monitoring for PFAS — commonly referred to as "forever chemicals" — and noted discharge-permit and cooling-method requirements could include temperature considerations. The bill also directs the PUC to report on projected regional renewable-generation market conditions by Jan. 15, 2027, and requires the Public Service Commissioner to recommend a model for data center decommissioning by Dec. 15, 2026.

Committee action: Representative Charlie Kimell moved that the committee find H.727 favorable; Represent Burkheart seconded. The clerk called the roll, and the transcript records affirmative responses from Representatives Brandan, Pulk, Kimell, Maslin, Guaz, Canfield and Florenheiser; Representative Page was recorded as absent. The committee announced the bill was voted "favorable" and reported from committee.

What remains: Committee members raised policy questions not resolved during the hearing, including whether a 20-megawatt threshold should be lowered to capture clustered smaller loads, how bill-back authority would apply to particular proceedings, and the staffing or contracting needs for agencies asked to prepare future reports. The bill will proceed in the legislative process for further review.