Vermont lawmakers are moving to establish regulations for large-scale data centers before the facilities arrive in the state, as developers have begun exploring opportunities in the region.
Developers have started “kicking tires or sniffing around” for potential data center sites in Vermont, according to a top Vermont utility lawyer who spoke to lawmakers in February. The interest comes as the Trump administration pushes for data center development, driven by artificial intelligence and cryptocurrency growth.
The Legislature is considering two bills to address the potential arrival of these facilities. The House is reviewing the Vermont Sustainable Data Centers Act, or H.727, which would ensure proper siting with environmental protections while minimizing impacts on state ratepayers. The Senate is considering S.205, which could place a moratorium on data centers until state regulators study their potential impacts in Vermont.
“If states do not define their own rules, decisions will increasingly be made elsewhere,” said Rep. Laura Sibilia, I-Dover, while introducing her House bill in February. Sibilia said her legislation would not prohibit data centers or discourage economic activity, but would regulate the factory-sized developments that can strain local electric grids, raise customer electric bills, and cause environmental and noise pollution in communities.
“This bill is about having this conversation now before proposals arrive, not after commitments have already been made,” Sibilia said.
Vermont already experienced one failed attempt to establish a large-scale data center. In St. Albans last year, then-town manager Sean Adkins worked with a developer on two planned projects requiring 8-12 megawatts or 50 megawatts of power. The larger facility could have created about 1,000 temporary construction jobs and 20 permanent jobs, according to Adkins, but the plans collapsed due to infrastructure costs.
“It all came down to power,” Adkins said. “It was going to cost just too much money to build a substation that would have allowed the project to move forward.” Connecting to the electric grid would have cost around $30 million, according to Adkins.
Adkins, who came to Vermont from Virginia’s “Data Center Alley” region that houses roughly 150 large-scale facilities, has since moved to Rutland as executive director of the Rutland Development Authority. “I wouldn’t be doing my job if I wasn’t trying to bring projects like that to Rutland,” Adkins said of data centers.
Currently, Vermont has at least three traditional data centers in Chittenden County that combined use about five megawatts of energy, according to Maria Royal, legislative counsel, who spoke to the House Committee on Energy and Digital Infrastructure in February.
The proposed legislation focuses on large-scale data centers requiring 20-100 megawatts of power. On the smaller end, that represents enough energy for 15,000 homes and requires about one million gallons of water daily to cool servers, roughly equivalent to the water usage of up to 4,000 households, according to Royal. These buildings typically span about 140 acres, or the size of two-and-a-half large supermarkets.
Data centers present both opportunities and challenges for Vermont. While the facilities create thousands of temporary construction jobs, they only require a couple dozen employees once operational. Economic benefits primarily come from property tax revenue, particularly important as Vermont’s population declines and state leaders seek ways to add housing and attract businesses.
“We have this fear of change, and my fear is rising electric rates with a lack of demand in the region and a lack of opportunities in Vermont,” said Kerrick Johnson, commissioner of the Vermont Public Service Department. “I’m not saying this is wonderful, I’m saying it presents an opportunity.”
Lawmakers aim to create regulatory frameworks before facilities are proposed rather than responding after developers make commitments.
