Senate committee revises data-center large-load bill; drops prescriptive curtailment language, debates payment vs. on-site generation

The Senate Natural Resources & Energy Committee on Thursday reviewed a revised strike-all draft of H727, a bill that would tighten state oversight of large data-center service contracts by adding cumulative facility definitions, site-suitability and design requirements, virtual-power-plant participation and new reporting rules.

Legislative Council attorney Maria Royal told the committee the new draft (identified in the hearing as draft 184) incorporates committee recommendations and chair-proposed changes, including a broadened definition of “facility” to capture multiple non-adjacent sites that “function as a single integrated operation” through shared infrastructure or unified operational protocols. Royal also walked members through added site-suitability analysis and requirements intended to maximize renewable hosting at new data-center developments.

The most contested provision addressed whether a data center could be designated in its contract as a primary curtailment load during grid emergencies. A representative from VELCO warned the committee that “having any kind of language that says we need to … curtail or load shed one customer over another … would be considered discriminatory” and could conflict with federally governed transmission rules and ISO New England procedures. The VELCO representative offered alternative draft language to avoid creating federal pre-emption or operational conflicts.

Officials from the Department of Public Service (identified in the record as TJ) agreed the provision risks inserting the Legislature into day-to-day reliability decisions and said the clause, as written, is likely “functionally meaningless” because utilities make situational calls based on immediate system conditions. TJ recommended removing the prescriptive curtailment language or relocating the issue to the PUC’s tariff-review process so that operational details could be set with industry input and under existing federal and regional reliability protocols.

Committee members said they supported the underlying policy goal — prioritizing life‑safety services in emergencies — but were wary of statutory language that could tie the hands of operators. One member summarized the trade-off: the provision’s intent to protect ratepayers and prioritize emergency services is sound, but the execution must avoid overriding operational discretion or inviting legal conflict.

The draft also includes energy- and climate-focused provisions. It would limit combustion-based backup generation to emergency use only and create an “energy transformation” payment calculated in the draft as a share of prior-year usage (an example in the draft described a calculation equal to 60% of prior-year usage multiplied by roughly 7¢/kWh, payable in advance and reconciled later). Department staff urged the committee to consider a “bring‑your‑own‑generation” approach instead of an advance payment, arguing payments can look like a “pay‑to‑play” mechanism and that requiring on-site, non‑emitting generation would more directly ensure new clean capacity is built to meet new demand.

The bill would also require data centers to participate in a utility’s virtual power plant or operate a self‑managed virtual power plant in coordination with the electric company. The committee discussed language designed to prevent data centers from claiming credit for existing state-supported resources (for example, EV chargers or batteries funded by other programs) while allowing those assets to be incorporated into virtual‑plant operations.

On transparency, the draft requires quarterly reports from data centers to the PUC and Department and makes them subject to public inspection, while preserving PUC authority to redact narrowly defined trade secrets or competitive financial information. Members discussed statutory guidance for redaction review (the transcript cites a statute read aloud as “30 BSA 202E C1”), and committee staff said the intent is to keep reporting as public as possible while allowing narrowly tailored redactions.

Contract term length was another substantive item. The committee reviewed data cited in testimony showing typical contract lengths changed after 2024. Attorney Adam McGuri recommended a 10‑year minimum contract with periodic check‑ins (he suggested a two‑year review mechanism) to reduce the risk of stranded infrastructure while allowing regular reassessment of demand forecasts and pricing.

No formal vote was taken. Committee members directed staff to prepare a new draft that removes or rewords the prescriptive curtailment designation (or relocates it for PUC consideration), clarifies reporting and confidentiality expectations, and refines the energy-transformation language; the committee plans to revisit the bill at a later session and asked staff to circulate the revised draft.

Quotes from the record that capture the debate include the VELCO representative’s warning that preferential curtailment language “would be considered discriminatory,” the Department representative’s view that the payment “reads like a kind of a paytoplay type of payment,” and attorney Adam McGuri’s practical recommendation that “10 years is a rough good approximation” for contract duration with periodic check‑ins.

The committee also briefly discussed two other bills (H710 and H740) and administrative drafting items before taking a short recess; H727 will return to the agenda when a revised draft is available.