This commentary is by Ben Edgerly Walsh, the climate and energy program director of the Vermont Public Interest Research Group.
Let’s start with what isn’t in dispute. The data center bill Gov. Phil Scott vetoed, H.727, was among the strongest such laws written in any state. AI data centers are driving up electricity bills across the country, and having major impacts on air, water and climate pollution in the process. And here in Vermont, that now-dead bill that would have addressed each of those issues passed both the House and Senate with overwhelming support from both Democrats and Republicans, before being killed by Gov. Phil Scott and the 52 Republican representatives who voted to sustain his veto.
You may hear that the final bill was somehow worse than the earlier House version — a fumble, a bill that “shape-shifted” into something that demanded a veto, as one commentary in these pages put it recently.
The truth of the matter is that the final bill built on what the House started, and protected Vermonters more effectively in almost every way than that initial version.
Let’s take a look at what actually changed.
On your electricity bill, the earlier version the governor preferred directed utilities to “mitigate the risk” that other ratepayers would cover “unwarranted” data center costs. To mitigate means to reduce impacts, not eliminate them, meaning the governor’s preferred bill inherently allowed data centers to pass on even some unwarranted costs to Vermonters.
The legislature rewrote that to require other ratepayers be “insulated from all costs” tied to data center deployment.
On pollution, the legislature turned vague language into hard requirements. It required data centers to maximize on-site renewable energy. It required them to fund energy-saving projects in surrounding communities, to offset their inherent environmental impact. And it barred them from running on-site fossil-fuel generators except in a genuine emergency, preventing the kind of practices that have spiked air pollution in communities across the country.
So put the question plainly to every representative who voted to sustain the veto, every organization like Vermonters for a Clean Environment that has since complained about this stronger version of the bill and Gov. Scott: Which of those provisions made the bill worse? Was it the one that shields your power bill? The one that cuts pollution? The one that delivers benefits directly to any communities hosting data centers?
The only way the “it got worse” math works is if weaker protection for Vermonters is the goal.
The governor also offered another reason for his veto. In his veto letter, he wrote that the bill imposed “new and unnecessary regulatory systems” that were only “seemingly aimed at data centers” and would drive other businesses away.
The reality is that the bill was narrowly targeted at data centers alone, at a time when state after state is tightening regulations on large loads across the board, sweeping in any business that draws a lot of power. Vermont’s legislature deliberately chose not to go that route. H.727 applied to data centers, and only data centers, a single and uniquely power-hungry class of user. It answered the governor’s stated concern before he ever raised it.
Lastly, the governor argued, “existing Vermont law already provides substantial regulatory authority to prevent harmful impacts.” In essence, “we’re fine, I’m not worried.”
That question, whether Act 250 and other Vermont laws already have us covered, was one of the very first things the legislature dug into when they took this bill up. The answer? Perhaps on paper, but there were clearly gaps.
In the context of an industry with numerous players that count their market value well into the hundreds of billions or even trillions* *of dollars, that can hire armies of lawyers unlike an Act 250 district commission or even the Vermont Public Utility Commission has ever seen, that is steeped in a move fast and break things mentality, the legislature chose to do everything it could to fill those potential gaps.
In essence, seeing massive costs and pollution from AI data centers around the country, the legislature took a better-safe-than-sorry approach. The legislature handed the governor the strongest data center protections in the country: narrowly written, hard on costs and pollution, leaving every other Vermont business or potential business untouched.
Simply put, the governor’s veto of a bill to protect Vermonters from AI data center costs and pollution is baffling. Vermont needs these protections before we suffer the harms people are already experiencing in other states. Data centers aren’t going away, so we’ll be back next session to fight for Vermonters again.
In the meantime, if a representative or governor tells you the bill they helped kill was actually too strong, ask them the one question they still haven’t answered: Which protection, exactly, were Vermonters better off without?