By Sam Douglass
Last Friday, the Vermont House of Representatives approved legislation that targets new construction and expansions of data centers. The bill creates regulations that supporters say will protect electricity ratepayers from increased costs, protect the environment, and promote equity.
The bill, H.727, introduced by Rep. Laura Sibilia (I-Windham 2), seeks to regulate data centers requiring 20 or more megawatts by mandating annual reporting and requiring operators to enter into large load service equity contracts.
These contracts would hold data centers accountable for paying their fair share of grid and infrastructure costs while ensuring that Vermonters aren’t subsidizing their electricity use.
Under the proposed legislation, the Public Utility Commission (PUC) must demonstrate that the data center serves the general good of the state before approving contracts. The PUC will also have to ensure that the terms of the contract will not negatively impact the grid, the environment, or conflict with environmental justice or equity policies. Contracts will also require collateral to mitigate risk, commitment to minimum payments aligned with expected electricity use, and fees for excess use.
Standards will also be established for the use and discharge of water, including PFAS (polyfluoroalkyl substances) and other contaminants.
H.727 is similar to another piece of legislation introduced this year. A separate proposal, S.205, introduced by Sen. Rebecca White (D-Windsor), would affect data centers that operate on 100 or more megawatts, but unlike H.727, would institute a complete moratorium on the siting or construction of new data centers until July 1, 2030. The bill also called for additional research to be conducted on their impact on the environment and electricity rates.
Vermont isn’t the first state to pass such legislation. Over the past few years, the majority of states have passed laws to regulate or otherwise restrict data centers over concerns of high utility usage. This is in contrast to federal policies on artificial intelligence and data centers following the December 2025 executive order that aimed to deregulate artificial intelligence in the states to avoid inconsistent state laws.
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.