Vermont’s secretary of natural resources testified before a U.S. Congressional committee last week in support of a bill that would direct states to limit the costs consumers shoulder for the water used by data centers.
Julie Moore told lawmakers she supports “requiring owners and operators to help pay for the water infrastructure impacts they create,” as well as studying the potential impacts data centers could have on nearby water sources.
Her testimony in Washington, D.C. — a rarity for Vermont officials — came just months after her boss, Republican Gov. Phil Scott, vetoed a tripartisan bill in Vermont that would have created a new regulatory framework for large data centers in the state, including measures that are similar to those proposed in the federal legislation.
Two of the Vermont bill’s leading supporters said they were surprised to hear the secretary’s testimony given Scott has continued, as recently as last week, to say he does not think Vermont needs new state-level regulations aimed at data centers.
Many of the facilities, which provide the computing power behind the boom in artificial intelligence technology, consume massive amounts of water for cooling and other purposes. In some cases, data centers built in recent years have faced backlash for discharging pollutants into local waterways. Vermont’s bill was wide-ranging and included far more than just water regulations — but Moore was nevertheless conveying to Congress some of its key goals, said Dan Fingas, the executive director of Vermont Conservation Voters. That’s one of the organizations that lobbied for the bill this year.
“I do think there’s a contradiction,” he said in an interview. “This testimony from Secretary Moore to Congress shows that they’ve already seen areas where Vermont is left unprotected — or, at least, needs more protection.”
Moore, in an interview, pushed back on that characterization. She said her testimony was unrelated to the reasons Scott rejected the bill, namely that he believes Vermont already has sufficient regulations in place to scrutinize a proposed large data center and that the bill went too far by subjecting the facilities to overly burdensome standards.
The Scott administration broadly supports the principle that ratepayers living near a data center should not have to pay higher costs to accommodate it, she said — but “that wasn’t at the crux of the governor’s veto.”
Her testimony comes as debate over how Vermont communities should prepare for the possible development of a data center has continued apace. In the absence of a state law, three cities and towns have passed regulations aimed at prohibiting data centers, at least temporarily, Seven Days reported Wednesday. In Vernon, one company has eyed the former Vermont Yankee site for a data center project, or something else, it has said.
Moore’s comments also come as data centers have become a major political issue nationally in the leadup to the midterm elections in November. Recent polling shows data centers, especially those used for artificial intelligence, are becoming increasingly unpopular with voters. Vermont Conservation Voters launched a public campaign last week called “Don’t Data Center Vermont,” to highlight what the organization says are the harmful impacts the facilities could have by using up large amounts of water, electricity and land, as well potentially causing pollution.
The bulk of Moore’s testimony, to a subcommittee of the U.S. House Committee on Commerce and Energy, focused on urging lawmakers to boost funding for a joint federal and state program that provides low-cost loans to public water systems to help them comply with the federal government’s drinking water safety standards. She was speaking on behalf of both the Vermont Agency of Natural Resources and a national association of the leaders of state and tribal environmental agencies.
But Moore also voiced support for the Water Cost Accountability Act, which would direct states to prevent public water systems from charging anyone other than the developers or operators of a data center for that facility’s water usage, or for the costs of expanding a system to accommodate a new data center. It would also require the U.S. Environmental Protection Agency to study where data centers get their water.
As of last week, the bill was in the initial stage of consideration in the House and a final version had yet to be formally introduced.
The subcommittee’s chair, U.S. Rep. Gary Palmer, R-Al., said during the hearing that the draft legislation would balance business needs with protecting consumers.
Data centers “can have positive impacts on local communities. They are major drivers of investment, economic growth, job creation and the development of our nation’s digital infrastructure,” he said. “However, those benefits should not come at the expense of families and small businesses through higher water rates.”
Vermont’s bill, meanwhile, would have created new safeguards from the potential water quality impacts of large data centers and helped shield water ratepayers from the costs of operating those data centers, among other measures, Fingas said.
The bill, H.727, would have required a data center that uses water for cooling to employ what’s known as a closed-loop system, which circulates a fixed volume of water rather than constantly drawing in fresh water. If a facility did not use a closed system, it would have to “minimize water use and not unreasonably burden a public water supply,” the bill said.
The legislation also would have required data centers to submit quarterly reports to the state on their water usage and required an additional layer of review for facilities using more than 150,000 gallons of water a day for cooling or other purposes.
The bill passed both the Vermont House and Senate with broad support. Scott’s veto caught many legislators by surprise; the House later came within just seven votes of overriding it. Advocates have already said they plan to push for a revised regulatory framework in the upcoming legislative session, which starts in January.
Fingas, of Vermont Conservation Voters, said he was happy to hear Moore talk about the impacts of data centers to Congress, but “I wish she was doing that more in our state.”
Ben Edgerly Walsh, climate and energy program director at the Vermont Public Interest Research Group, which also lobbied for H.727, agreed, calling the regulations Moore testified in support of “common sense.”
Edgerly Walsh said in an interview that he doesn’t think a federal bill regulating data centers would amount to much, though, because he expects President Donald Trump would veto it.
Trump has voiced strong support for the industry, writing in a post on his Truth Social platform last month that “the only reason that communities throughout the U.S.A. should not want Data Centers is if they want to end up being backwards and poor.”
As Edgerly Walsh sees it, “we’re not going to see meaningful federal protections. So, we have to look to what we can do as Vermonters,” he said.
Gov. Scott, for his part, reiterated his opposition to new statewide data center regulations during his weekly press conference last week.
Scott said he was not opposed to cities and towns adopting their own policies but thought that, like the statewide bill, it would be unnecessary because there are few if any existing proposals to build such a facility in the state.
“I think the likelihood of a data center in Vermont, anywhere, in the future, is slim to none,” he said.
Clarification: Due to an editing error, a previous version of this story did not fully characterize the scope of support for Vermont’s data center regulation bill.
