by Alison Despathy This past legislative session, Vermonters for a Clean Environment (VCE) participated in the development of a responsible data center bill, H.727. Despite these efforts, Governor Scott's veto of the bill was justified due to the Senate's massive fumble.
Most are well aware that data centers are wreaking havoc throughout the country: guzzling power, contaminating water and land, destroying aquifers, causing droughts, increasing electric rates, disrupting neighbors and communities with infrasound and radiofrequency radiation pollution.
Some argue that Vermont will not attract data centers because of higher electric rates and heavy regulation and permitting. However, with increases in the use of Artificial Intelligence and data generating tech in every sector expanding the digital grid, the demand – whether we like it or not -- is real and may invite data centers to Vermont.
Working to ensure comprehensive data center regulations, we met with legislators and regulators, researching existing policy and gaps. It is simply good sense to get ahead of an impending issue and we shared concerns about other states' experiences with large load data centers.
H.727 cruised out of the House with strong support and protections in place for water, ratepayers, the electrical grid and pollution to be regulated via joint jurisdiction of the Public Utility Commission and Act 250.
Data centers are a perfect example of the importance of Act 250 for guiding development of large, commercial projects. Act 250 is well equipped to regulate these beasts that humanity and society are ever more dependent on due to digital expansion.
Next stop was the Senate and here the bill took a hard left turn into the land of extremism and bad policy.
The first deathblow came in the form of an 'Energy Transformation Payment', basically an extortion fee or saying it gentler “Pay to Play” as called out by TJ Poor, Director of Planning at the Department of Public Service.
Director Poor understands Vermont's electric grid and power contract world better than most in the state. This is his job.
On May 8, Director Poor testified in the Senate and explained that the Department could not support H.727 with the newly added Energy Transformation Payment. His written testimony stated,
“The Energy Transformation Payment is a provision that will cause the Department to oppose the bill. The Energy Transformation Payment – approximately $6 million per year – was added to published legislation yesterday. I understand the extraction of cash from prospective Vermont businesses through the Energy Transformation Payment is intended to achieve emissions reductions above and beyond the requirements of the renewable energy standard but would fail to sufficiently and quickly achieve its intent of encouraging greenhouse gas reductions. It sends the wrong message to prospective businesses thinking about locating in Vermont (beyond just data centers), signaling that a new industry should look elsewhere.”
Unfortunately, This was the result of a committee chair listening to special interest groups, instead of considering the advice of experts who work for Vermonters.
Senate Natural Resources and Energy Chair Watson could have fixed this mistake, could have salvaged the bill, should have sought a solution but chose not to.
So let's be honest here, the data center bill was killed by Chair Watson by refusing to seek compromise.
Extortion is not good policy.
Some may attempt to justify this “extraction of cash” extortion payment when it comes to Big Data -- even though as digital grid users, participating humans and industries are generating the demand -- but the Senate also added language that further compromised the bill and enabled water pollution.
Essentially this allowed data centers an unfair advantage to pollute if they received a permit to withdraw surface water. This is analogous to regulating the faucet and then ignoring the drain and the pollution discharged from the system. If you built a house and drilled a well but then ignored the waste water and sewer, a disaster would be the outcome.
On May 19, the Land Use Review Board issued a memo and testified in the House Energy Committee raising a red flag about the Senate version of the bill. It was not resolved.
This is the reality of the data center bill saga. Hopefully Vermonters can see through the propaganda because the Governor's veto of the data center bill has been manipulated for political gain. Many special interest organizations have ignored key issues and are taking advantage of people’s lack of information and warranted fears of data centers impacts.
What started as a thoughtful, effective bill shape-shifted into irresponsible policy that demanded a veto.
Veto was the only responsible move, unless you actually believe “extraction of cash” extortion, water pollution and environmental contamination are good policy. With a fresh legislature next session, Act 250 protections and existing and necessary new regulations can be brought together to create a specific policy for data centers because at the rate the digital grid is growing due to human use and demand, this is not going away, as much as we might wish it would.
Alison Despathy, of Danville, is Community and Environmental Health Director for Vermonters for a Clean Environment (VCE).
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