H 727 — An act relating to sustainable data center deployment

(3) will result in an economic benefit to the State and its residents;

(4) will not have an undue adverse effect on aesthetics, historic sites, air and water purity, the natural environment, the use of natural resources, and the public health and safety, with due consideration having been given to the criteria specified in 10 V.S.A.

§§ 1424a(d) (outstanding resource waters) and 6086(a)(1)–(8) and (9)(K) (conditions and criteria for State land use and development plans), impacts to primary agricultural soils as defined in 10 V.S.A.

§ 6001, community noise levels, and the attainment of the State’s greenhouse gas emissions reduction requirements;

(5) is consistent with the principles for resource selection expressed in the applicable electric distribution company’s approved least-cost integrated plan;

BILL AS PASSED BY THE HOUSE H.727 Page 6 of 22 (6) is consistent with the Electrical Energy Plan approved by the Department under section 202 of this title, or that there exists good cause to permit a variance;

(7) is consistent with the Vermont Long-Range Transmission Plan prepared by the Vermont Electric Power Company, Inc.;

(8) will not have an adverse effect on any segment of the waters of the State that have been designated as outstanding resource waters by the Secretary of Natural Resources;

(9) can be served economically by existing or planned transmission facilities without undue adverse effect on Vermont utilities or other retail ratepayer classes;

(10) complies with applicable air pollution control requirements under the federal Clean Air Act, 42 U.S.C.

§ 7401 et seq.;

(11) complies with harvesting procedures and procurement standards that ensure long-term forest health and sustainability, including the guidelines and standards adopted under 10 V.S.A.

§ 2750;

(12) is consistent with State energy efficiency requirements;

(13) is consistent with environmental justice and equity policy as established pursuant to 3 V.S.A.

chapter 72;

and (14) adequately accounts for potential facility decommissioning.

BILL AS PASSED BY THE HOUSE H.727 Page 7 of 22 (c) The Commission shall adopt by rule procedures for implementing the requirements of this section that are modeled after sections 248 and 248a of this title, to the extent deemed reasonable and necessary by the Commission.

Accordingly, the procedures shall include requirements related to:

an application fee;

notice;

letter of intent;

review period;

exemptions from other law;

participation by municipal bodies;

consideration of municipal plans and recommendations;

the retention of experts;

fees for the participation of other State entities, as appropriate, including the Department of Public Service, the Agency of Natural Resources, the Agency of Agriculture, Food and Markets, the Agency of Commerce and Community Development, and the Environmental Justice Advisory Council;

and a review process.

§ 286.

DEMAND-SIDE MANAGEMENT (a) The Commission may establish a demand-side management program applicable to data centers that includes requirements and standards applicable to data center energy and water usage.

In developing such a program, the Commission shall consider:

(1) cositing requirements for renewable energy sources, batteries, and other on-site generation and storage;

(2) water conservation initiatives, such as the use of recycled water for cooling;

BILL AS PASSED BY THE HOUSE H.727 Page 8 of 22 (3) the establishment of data center microgrids for critical services that would provide continuous and reliable energy for critical services, operate independently from an electric company’s power system, ensure uptime during outages, provide greater efficiencies for managing energy costs and carbon emissions, and enhance the resilience of the State’s electricity network;

(4) authorization for a data center to procure its own energy resources;

(5) a prohibition on fossil fuel power purchase agreements that provide incentives or discount rates to data centers;

(6) enhanced energy efficiency standards;

and (7) any other standard or requirement deemed appropriate by the Commission and consistent with the purpose of this subchapter and in the public interest.

(b) Any program developed by the Commission pursuant to this section shall take effect upon approval of the General Assembly by legislative enactment.

§ 287.

QUARTERLY AND ANNUAL REPORTS (a) Data center.

Within three months after a data center becomes operational, and in a form and manner determined by the Commission, the owner of the data center shall begin submitting quarterly reports to the Commission and the Department of Public Service.

Each quarterly report BILL AS PASSED BY THE HOUSE H.727 Page 9 of 22 shall include the data center’s water and energy usage, as well as a description of any interconnection requests the owner has submitted in other states.

(b) Department.

Annually, beginning on or before January 1, 2028, the Commissioner of Public Service shall submit a written report on data centers to the House Committees on Energy and Digital Infrastructure, on Environment, and on Agriculture, Food Resiliency, and Forestry and to the Senate Committees on Finance, on Natural Resources and Energy, and on Agriculture.

The report shall include findings and recommendations related to the energy, environmental, and economic impacts of data center construction and deployment in Vermont, including any benefits to all electric ratepayers from electric infrastructure projects undertaken to provide power to a data center.

§ 288.

FINANCING STATE AND LOCAL BENEFITS (a) It is the intent of the General Assembly to establish a financial structure that will support State and local energy, environmental, and economic benefits and to finance that structure with:

(1) a percentage of tax revenue generated from sales, property, or income taxes applicable to data centers;

(2) a data center gross receipts tax;

or BILL AS PASSED BY THE HOUSE H.727 Page 10 of 22 (3) another financing mechanism recommended by the Commissioner of Public Service that the Commissioner deems to be consistent with the purpose of this subchapter and in the public interest.

(b) The Commissioner of Public Service, with input from the Commissioner of Taxes, shall develop findings and recommendations for implementing the legislative intent of this section, which shall be submitted in a written report to the House Committees on Energy and Digital Infrastructure, on Environment, on Ways and Means, and on Agriculture, Food Resiliency, and Forestry and to the Senate Committees on Finance, on Natural Resources and Energy, and on Agriculture, on or before January 1, 2028.

§ 289.

RULES In addition to the rules required by this subchapter, the Commission may adopt any other rules it deems necessary to implement and enforce the provisions of this subchapter consistent with its purpose and in the public interest.

Sec.

2.

APPLICATION 30 V.S.A.

chapter 5, subchapter 3 (established in Sec.

1 of this act) shall apply to any data center not operational on or before the effective date of this act.

Sec.

3.

EFFECTIVE DATE This act shall take effect on passage.

BILL AS PASSED BY THE HOUSE H.727 Page 11 of 22 Sec.

1.

30 V.S.A.

chapter 5, subchapter 3 is added to read:

Subchapter 3.

Data Centers § 281.

SHORT TITLE This subchapter shall be known and may be cited as the “Vermont Sustainable Data Centers Act.” § 282.

§§ 283. 283.

VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 2 of 12 (2) “Facility” means all buildings, equipment, structures, and other stationary items that are located on a single site or on contiguous or adjacent sites and that are owned or operated by the same person or by any person that controls, is controlled by, or is under common control with such person.

§BILL 284.AS PASSED BY THE HOUSE H.727 Page 12 of 22 § 284.

VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 3 of 12 (3) specify the duration of the contract and the date or the estimated date that the electric company will begin to provide electric service to the data center;

BILL AS PASSED BY THE HOUSE H.727 Page 13 of 22 (4) obligate the data center to pay a minimum amount or percentage based on the data center’s projected electricity usage for the duration of the contract to ensure compliance with subdivision (1) of this subsection;

VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 4 of 12 (c) The Commission shall not approve a large load service equity contract unless the Commission first finds that the same will promote the general good of the State.

BILL AS PASSED BY THE HOUSE H.727 Page 14 of 22 (d) Before the Commission approves a large load service equity contract as required under this section, the Commission shall find that the terms of the contract:

VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 5 of 12 (e) A data center shall not be eligible to participate in an energy savings account or a customer credit program pursuant to subdivision 209(d)(3)(C) of this title, or a self-managed energy efficiency program pursuant to subsection 209(j) of this title.

§BILL 285.AS PASSED BY THE HOUSE H.727 Page 15 of 22 § 285.

§§ 286. 286.

Annually, beginning on or before January 15, 2028, and provided at least one data center has entered into a large load service equity contract pursuant to this subchapter, the Commissioner of Public Service shall VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 6 of 12 include in the Department’s annual report published pursuant to subsection 202b(e) of this title findings and recommendations related to the energy, environmental, and economic impacts of data center construction and operation in Vermont, as well as any impactful developments within the region, BILL AS PASSED BY THE HOUSE H.727 Page 16 of 22 including any benefits to all ratepayers from electric infrastructure projects undertaken to provide power to one or more data centers.

§§ 287. 287.

APPLICATION 30 V.S.A.

§§ 283(1). 283(1).

§§ 6001 6001 is amended to amended read:

§§ 6001. 6001.

* * * VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 7 of 12 (3)(A) “Development” means each of the following:

§§ 283(1). 283(1).

BILL AS PASSED BY THE HOUSE H.727 Page 17 of 22 Sec.

§§ 6086a 6086a is added to read:

§§ 6086a. 6086a.

§§ 283(1). 283(1).

VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 8 of 12 (B) R-CF2OCF2-R′, where R and R′ can either be F, O, or saturated carbons;

BILL AS PASSED BY THE HOUSE H.727 Page 18 of 22 (b)(1) A data center shall identify to the District Commission reviewing the data center’s application for a permit under 10 V.S.A.

§§ 1418 1418 for any withdrawal of groundwater by the data center notwithstanding the permitting threshold of withdrawal of more than 57,600 gallons of VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 9 of 12 groundwater a day.

§§ 1418(b)(6). 1418(b)(6).

§BILL 1043AS PASSED BY THE HOUSE H.727 Page 19 of 22 § 1043 shall require a data center to cease withdrawals under drought conditions.

§§§§ 1251–1388, 1251–1388, and any regulations adopted thereunder on January 1, 2026.

(f) A data center that discharges wastewater into a surface water of the State shall identify PFAS that may be used in the operation and submit a plan to the Agency of Natural Resources establishing a program that monitors the wastewater discharge from the data center, including monitoring for the VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 10 of 12 presence of PFAS.

BILL AS PASSED BY THE HOUSE H.727 Page 20 of 22 Sec.

VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 11 of 12 (c) The Commission shall submit the report to the House Committee on Energy and Digital Infrastructure and the Senate Committees on Finance and on Natural Resources and Energy.

RECOMMENDATION ON DATA CENTER DECOMMISSIONING (a) The Commissioner of Public Service, in consultation with the Secretary of Natural Resources, the Chair of the Land Use Review Board, and any other BILL AS PASSED BY THE HOUSE H.727 Page 21 of 22 interested stakeholders deemed appropriate by the Commissioner, shall recommend a regulatory model for data center decommissioning.

§§ 283(1), 283(1), of this act.

VT LEG #388446 v.1 AS PASSED BY HOUSE H.727 Page 12 of 12 (4) guidelines for data sanitization, the physical destruction of highly sensitive storage devices, and a documented chain of custody for information technology assets;

BILL AS PASSED BY THE HOUSE H.727 Page 22 of 22 (6) a timeline for commencing and completing the decommissioning process after the abandonment, closure, destruction, or permanent cessation of operations of a data center;

VT LEG #388446 v.1