The bill passed by Vermont's House and Senate now awaits action by Governor Phil Scott. Photo: Creative Commons/Jared C. Benedict
May 26, 2026 (Montpelier, VT) – The Vermont legislature has given final passage to H.727, the state’s first-ever legislation to regulate the construction and operation of data centers. The bill passed with overwhelming, tripartisan margins — 26-3 in the Senate and with a near-unanimous voice vote in the House. The legislation establishes a comprehensive regulatory framework for large-scale data centers, among the strongest in the nation, ensuring that Vermont’s ratepayers and environment are protected in the event the rapidly-growing data center industry proposes a 20MW+ facility in Vermont.
The bill now awaits action by Governor Phil Scott.
“Legislators have sent a clear message that Vermont will not sacrifice its communities, public health, or natural resources to accommodate data centers,” said Adam Aguirre, staff attorney at Conservation Law Foundation. “We applaud the legislature’s tripartisan passage of this bill and urge Governor Scott to do his part to protect Vermont families, businesses, and the environment from unchecked industrial expansion.”
“Vermont legislators just sent a clear, tripartisan message: the data center industry will be held to a high standard here – Vermont’s ratepayers and environment and the climate are too important to accept any other outcome,” said Ben Edgerly Walsh, Climate and Energy Program Director at VPIRG. “This bill is the result of months of work by legislators and Vermonters who made clear they don’t want to see our state repeat the mistakes made elsewhere — where ordinary ratepayers ended up footing the bill for one of the wealthiest industries in history, and climate, air, and water pollution went through the roof. Now Governor Scott needs to join the legislature in protecting Vermont families.”
“As data centers dramatically drive up energy bills in the places that host them, Vermont lawmakers, thankfully, took a proactive approach,” said Johanna Miller, energy and climate program director at the Vermont Natural Resources Council. “H.727 lays out a pathway to ensure that if any large-scale data centers come to Vermont, they will not jack up electric bills, undermine Vermont’s climate progress, or pollute precious water supplies. In this era of soaring energy costs, divisive rhetoric, and a lot of mis- and disinformation, it’s great to see lawmakers working together across party lines to do this important work on behalf of all Vermonters. I hope Governor Scott signs the bill to ensure this regulatory framework protects Vermonters.”
H.727 applies to any facility that can use 20 megawatts or more of power for data processing and related services. Key provisions include cost protections for customers, energy transformation payments to host communities, restrictions on fossil fuel backup generation, minimum 10-year contracts, on-site renewable generation requirements, and strong water protections.
Data centers are among the fastest-growing sources of electricity demand in the United States. The average new U.S. data center is projected to nearly double in size by 2028, and some facilities currently being planned would consume far more electricity annually than the entire state of Vermont. In state after state that has moved quickly to attract data center investment without adequate safeguards, ordinary ratepayers have seen substantial electricity rate increases as a result of data center load growth.
Vermont’s legislation drew on that experience, as well as testimony from energy finance experts including Jigar Shah, former director of the energy loan program at DOE, who testified that requirements for on-site storage, Virtual Power Plant participation, and restrictions on fossil backup generation represent the right set of tools for Vermont and a growing national trend in smarter data center regulation.
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