This commentary is by Alison Despathy, the community and environmental health director for Vermonters for a Clean Environment.  This past legislative session, Vermonters for a Clean Environment participated in the development of a responsible data center bill, H.727. Despite these efforts, Gov. Phil Scott’s veto of the bill was justified because of the Senate’s massive fumble. Many people believe data centers are wreaking havoc across the country: guzzling power, contaminating water and land, destroying aquifers, causing droughts, increasing electric rates, and disrupting communities with noise pollution. Some argue that Vermont won’t attract data centers because of its high electric rates and heavy regulation and permitting. However, with increases in the use of artificial intelligence and data-generating technology in every sector expanding the digital grid, demand is real — whether we like it or not — and may invite data centers to Vermont. Vermonters for a Clean Environment met with legislators and regulators, working to ensure comprehensive data center regulation and 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. Next stop was the Senate, and here the bill took a hard left turn into the land of extremism and bad policy. READ MORE The first blow came in the form of an “energy transformation payment” or, as the director of regulated utility planning at the Vermont Department of Public Service, TJ Poor, put it, “pay to play.”  Poor understands Vermont’s electric grid and power contract world better than most in the state. This is his job. On May 8, he testified in the Senate and explained that the department could not support H.727 because of the newly added energy transformation payment.  His written testimony stated that “the Energy Transformation Payment is a provision that will cause the Department to oppose the bill. The Energy Transformation Payment — approximating $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.” This was the result of a committee chair listening to special interest groups, instead of considering the advice of experts who work for Vermonters. The chair of Natural Resources and Energy, Sen. Anne Watson, D/P-Washington, could have fixed this mistake and salvaged the bill but chose not to. In my view, the data center bill was killed by Watson’s refusal to seek compromise. Extortion is not a good policy. Some may attempt to justify a payment like this 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 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 wastewater and sewer, the outcome would be a disaster. 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. 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 the impact of data centers. What started as a thoughtful, effective bill shape-shifted into irresponsible policy that demanded a veto.  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 this issue is not going away, as much as some of us might wish it would. Read the story on VTDigger here: Extortion and pollution killed the data center bill. ...read more read less