By Sam Douglass
Gov. Phil Scott on Thursday vetoed H.727, a bill intended to regulate the development of large-scale data centers in Vermont, arguing the legislation would create unnecessary regulations and potentially harm the state’s economy. But it’s possible that the legislature will override his veto.
In a veto letter sent to lawmakers on May 28, Scott said Vermont already has regulatory authority through Act 250, Public Utility Commission oversight, environmental permitting, energy siting requirements, and local zoning laws to address concerns about data centers.
“The last thing Vermont should do is worsen our economic challenges by adding new and unnecessary regulatory systems,” Scott wrote.
While the Governor acknowledged concerns raised by many Vermonters about the strain large-scale data centers can place on energy systems and infrastructure, Scott argued the bill’s implications would extend beyond the technology sector.
“Although the bill is seemingly aimed at data centers, its broader message extends far beyond those facilities and into areas Vermont depends on for many of its best jobs,” he wrote.
The governor specifically pointed to industries such as advanced manufacturing, semiconductor production, clean energy, and other innovation-focused sectors that could be negatively impacted because they also rely heavily on energy and infrastructure investments.
Scott said the legislation “creates an unacceptable precedent” and risked discouraging future investment and economic development.
“We cannot afford policies that risk driving current or future jobs and investment to other states,” he wrote.
The Governor indicated he could support a revised version of the proposal if the legislation more closely resembles an earlier House-passed version of the bill.
However, despite his arguments in opposition to the bill, bill sponsor Rep. Laura Sibilia told VDC that the Scott administration did not express these arguments during House testimony and was unavailable to meet with the House committee on the Senate version that was passed. The legislature received a one page letter from the administration in mid-May.
H.727, was approved by lawmakers this year amid growing national debate over the rapid expansion of energy-intensive data centers used to support artificial intelligence and cloud computing. Just this week, public outcry in New Hampshire over the development of a data center in Nottingham resulted in the plans being scrapped. While other states in the northeast have already seen significant development of data centers, Vermont has a history of rejecting large scale developments.
The Governor’s veto sends the bill back to the Legislature, where lawmakers could attempt to override it. Considering the Senate passed the legislation on a 26-3 vote, and with little opposition on a voice vote in the House, it’s possible that an override vote will be taken up.
Information for In Committee news reports are sourced from GoldenDomeVt.com and the General Assembly website. Generative AI has not been used in the writing of this story.