Vermont Legislature SmartTranscripts:

[Representative Amy Sheldon (Chair)]: Hi. Good morning, and welcome to the House Environment Committee. This morning, we are to walk through H seven twenty seven, which we were doing a look at. We took a look at last week, and it's now we're gonna look at the version as passed out of the House Energy Committee with the two main directors of the bill. Welcome back, Maria and Mike.

[Maria Royal (Legislative Counsel)]: Morning. Happy to be here. Maria Royal with legislative counsel.

[Michael Grady (Legislative Counsel)]: Michael Grady, legislative counsel.

[Maria Royal (Legislative Counsel)]: And so what we have for you, and I've just pulled up a copy here. It's posted online, is a copy of h seven twenty seven as voted out of House Energy and Digital Infrastructure. And then we added some comments specifically based on some of the concerns and recommendations that this committee had has. So we'll just go through those. So the first issue we're gonna get to oh, I can't see it because my my knee doesn't show that. Sorry about this. Here we go.

[Representative Amy Sheldon (Chair)]: Don't have to have it on screen because we'll probably all just pull it

[Maria Royal (Legislative Counsel)]: up anyways. Oh, I don't have to have it on screen? No. Oh.

[Representative Amy Sheldon (Chair)]: That makes your life easier because don't know about you I think most of us are going look at it online.

[Maria Royal (Legislative Counsel)]: I think it'll work now. Those comments I couldn't see because So my gallery was blocking you'll remember that under this proposal, a utility in a data center enters into a large load service equity contract, and there are specific provisions that have to be in that contract. And then ultimately, the PUC reviews the contract and must approve the contract. And so what I'm looking at in subsection D, and if you're online, this is on page four, there are specific findings that the PUC needs to make before approving a contract. And one of the recommendations this committee made, you noted that there was some overlap between the PUC's findings and the criteria that are reviewed under act two fifty. And your suggestion was to review those and remove any duplicative findings. And, health energy did, in fact, do that. I don't know if I'm gonna be able to pull this document up.

[Michael Grady (Legislative Counsel)]: And they they talked to the Land Use Review Board, Peter Gill and Brooke Tangledown, and and both of them recommended that the PUC considerations were duplicative of the act two fifty and could be removed.

[Representative Amy Sheldon (Chair)]: Good to hear.

[Maria Royal (Legislative Counsel)]: And so I don't know if you wanna look at it now, but there is a document that I prepared that is posted, and I can also pull it up now, that shows what findings were removed and how they compared to the Act two fifty criteria. Do you want to review that?

[Representative Amy Sheldon (Chair)]: Let's see how much time we have.

[Representative Sarah "Sarita" Austin (Clerk)]: Thanks. Should we all?

[Representative Amy Sheldon (Chair)]: We are on page four of the the bill that's under Maria. Thank you.

[Maria Royal (Legislative Counsel)]: Yep. And the other issue, there had been a finding related to decommissioning, and there was some confusion in house energy about to what extent act two fifty actually looked at potential decommissioning issues. And ultimately, after conversations with the land use review board, other entities, they decided to ask the Department of Public Service to prepare a recommendation for a regulatory model that would have decommissioning requirements. So there's a report back, and that's at the end of the bill. So just wanted to alert you to that. And then I think oh, the application section, this committee made a suggestion, which Health Synergy viewed favorably, and that was to ensure that this new law would apply to traditional data centers, those that are in operation now, should they seek to expand their capacity and meet the higher threshold that would trigger this process. So that was amended. And then we're getting into the Act two fifty. This is page three page seven, section three. There was a recommendation to consider possibly lowering the threshold. You'll remember that a data center, as defined under this bill, is a facility that uses has a capacity to use 20 megawatts of power. So there was a suggestion of maybe lowering that threshold or considering another trigger, like based on water usage, for example. And House Energy did not oppose that idea, but simply just didn't have time to really think through that in terms of expanding Act two fifty further and noted that the 20 megawatt standard is on the very low end in terms of states that do regulate AI data centers. It's the lowest that I have found so far, looking at other states. They didn't they didn't feel ready to veer off of the data center, and start thinking about other triggers. So and then I I'm gonna turn it over to Mike. Section four concerns the water use permitting.

[Michael Grady (Legislative Counsel)]: So the the committee upstairs took significant testimony on this, and they reviewed your recommendations and and largely accepted all of your recommendations with regard to water. They did not change anything with the definitions of closed loop cooling system or data center. They accepted your recommendation of the EPA definition of PFAS. With regard to the permitting, they accepted your recommendation on groundwater withdrawal and surface water withdrawal. I will note, ANR has sent an email saying that they have objections to this section. And one of the things that they proposed was combining the groundwater withdrawal permit requirement and the surface water withdrawal requirement with the requirement that, on page nine, that a data center shall obtain all applicable water quality and water resource protection permits from ANR. What that would have done is it would have removed your decision and recommendation that regardless of the volume of withdrawal via data center, that it would need a groundwater withdrawal permit. Because right now, generally, not talking about the exemptions, but generally, if you're gonna withdraw more than 57,600 gallons of water groundwater a day, you need a groundwater withdrawal permit. You said regardless of how much the data center is withdrawing per day, they need a groundwater withdrawal permit. That's your policy decision. It doesn't there's no federal law that would dictate that otherwise. Maybe you could have amended the groundwater withdrawal statute, but in Act two fifty, you do things like this fairly often. And then the surface water withdrawal permit, there is no threshold yet because there is no permit yet. But still, if you wanted to be clear that a data center that's surface water to cool needed that permit, I don't I don't see any harm to including that.

[Representative Amy Sheldon (Chair)]: We did include the surface water as well.

[Michael Grady (Legislative Counsel)]: Yes. One of the other things that they objected to the ANR is the use of the on page nine by 17 through 21 that the data center shall obtain from ANR a water quality certificate that meets the same criteria as the Clean Water Act section four zero one. They just struck it. I did not hear their testimony about why they wanted to strike it. I did testify to you and to House Energy that poor ones can take a long time and can take significant resources. And I think one of the things that they identified in their email is that language would require resources. And this may be what they're referring to, but I don't know because that email was not specific enough, in my opinion. Didn't provide details of why they were objecting. Moving on, with regard to PFAS, there had been a proposal by you that with regard to PFAS that when it was intentionally added, that it would be prohibited. And ANR also had language about defining that standard based on intentionally added. But I had a couple of concerns about that. First, when there's a discharge standard, there's no intent requirement. It's like if you are discharging waste to a water, it's prohibited unless you have a permit. And so it doesn't mean if you intended to do that or or to you're you're not immunized because it's accidental. If you are doing it, it's prohibited. In addition, the definition of intentionally added that was cited is to a consumer products law, which literally would have constrained the scope of that prohibition to just when the manufacturer is adding PFAS potentially to the product for the purpose of the PFAS's use. So any unintentional PFAS added, any PFAS from equipment that's used PFAS generally isn't used in PVC piping, but any other type of piping where PFAS may have been used, that wouldn't have been considered as part of that discharge standard. Now maybe they're also going to argue that generally when there's a prohibition on discharge, it's a prohibition unless you obtain a permit from ANR. But, a, there's no effluent standard for PFAS right now. So what would they do? Require filtration? Maybe. Or prohibit it like they have at other places. And generally, if you, the General Assembly, want to make a policy decision that a certain type of discharge is prohibited, you can do that. And the prime example of that is how you have prohibited discharges from farms, and you don't let farms have a discharge. And you don't you last year, you said they can get a CAFO permit, but they can only get that CAFO permit for a hundred year flood. So you can make that policy decision. And it it would be more stringent than the feds, but that's what your tenth amendment authority allows you to do. You can be stricter underneath the federal Clean Water Act than the feds are. And you already are, because your definition of waste is much broader than the GPA definition of pollutant. So that, I think that really is the only thing that they did not do with regard to water when you recommended the intentional addition of PFAS. Everything else, house energy agreed to. Unless I'm missing something. Right?

[Maria Royal (Legislative Counsel)]: No. I think that's right.

[Representative Amy Sheldon (Chair)]: Members have questions on this? Representative Austin and then Pritchard.

[Maria Royal (Legislative Counsel)]: Yeah. I'm wondering on page nine,

[Representative Sarah "Sarita" Austin (Clerk)]: line seventeen eighty. If the EPA if we have to abide by the clean water at section, then will the EPA be monitoring that as well? That's one question.

[Michael Grady (Legislative Counsel)]: No, because what you're saying is that they're going to ANR is going to follow the process that's used for that federal four zero one. It's not that they're actually issuing the four zero one. It's the process that they're to do. Is that novel? Yes. Has it been done before? No. How they're gonna do it? I don't. But they have way of going through the four zero one. They have a process for it. There is a lot of guidance that EPA issues for doing four zero one that they could follow in implementing the same analysis. But it's novel. It's new. But it's not going to be overseen by EPA.

[Representative Sarah "Sarita" Austin (Clerk)]: And the second question is on page six, section two one eighteen, where it says traditional.

[Michael Grady (Legislative Counsel)]: Could you could you tell me where that is, p page six?

[Representative Sarah "Sarita" Austin (Clerk)]: Yeah. Oh, section two. Yep. And then line 18 where it says traditional. Like, do data centers have?

[Maria Royal (Legislative Counsel)]: That's a great question. It's sometimes how they're referred to when people compare, like, AI data centers with traditional to existing data centers. It's a it's not a specific term, but that's often how they're referred to. So Vermont has three data centers currently. Combined, they use less than one megawatt of power. Smaller traditional data centers, the ones that provide cloud services and so on.

[Representative Amy Sheldon (Chair)]: Did did So that's a term that you use when you're, I don't know, in your world of

[Maria Royal (Legislative Counsel)]: It's not an official term, but it is often used. How these big AI data sets compare to the traditional data set that we're used to, but there's no official I think the keyword more is the smaller traditional data center that is operational on the effective date, basically any data center.

[Representative Amy Sheldon (Chair)]: Why wouldn't it just exist?

[Maria Royal (Legislative Counsel)]: It could. I'm wondering. Could.

[Michael Grady (Legislative Counsel)]: Well, that thought. Five years from now, the mega is pretty traditional.

[Representative Sarah "Sarita" Austin (Clerk)]: Have a definition traditional.

[Representative Amy Sheldon (Chair)]: That's me. I'm done. Thank you. Representative Pritchard. We

[Representative Christopher "Chris" Pritchard (Member)]: talked about I think we had a discussion when we were talking about this, about testing the water before it went into the system, closed loop or otherwise, and then testing it when it was discharged. Is that I don't see that in here. That that is not in here, but one of the things you need to look at that PFAS language, it's the addition of the PFAS to the water that is prohibited. It's not the water that comes in without with PFAS in it. So we are assuming the water that's coming out well, so it has to be determined if the water coming into it has a PFAS PFAS in it already.

[Michael Grady (Legislative Counsel)]: I I do think there's probably gonna be a baseline that you're gonna need to determine. Yeah. Yeah. I think that's kinda important. If it's PFAS free water going into the system. Right. And remember, they have to submit a a monitoring plan that ANR has to approve for PFAS at the center. So are they testing it beforehand? Are they taking it from the public water system? Yeah. Is it shipped in from someplace that's already tested it?

[Representative Amy Sheldon (Chair)]: Further questions?

[Representative Sarah "Sarita" Austin (Clerk)]: Can I ask you a question? Yes. It safe and so that confuses in all of them?

[Representative Amy Sheldon (Chair)]: Yes. We've taken that testimony. That's what I've done. Some background level seems to be seems to be an OR. Representative Morris? Thank you,

[Michael Grady (Legislative Counsel)]: madam chair. I just had a clarification question on the decommissioning, and I know it's not relative to our committee necessarily. When VY decommissioned, that wasn't an Act two fifty process, I don't think. I think that was a licensing under the PUC. I

[Maria Royal (Legislative Counsel)]: think that's right. I think it was under the PUC. But it is actually a land use issue. So I wouldn't say it's not your jurisdiction. Do you want to look at the section six that I pulled up, which concerns that recommendation on the decommissioning land? This is on page 11. So this would require the commissioner of public service in consultation with the secretary of ANR and the chair of the Land Use Review Board and any other interested stakeholders deemed appropriate by the commissioner to recommend a regulatory model for data center decommissioning. And then it just cross references the definition of data center. And then that requires that the model developed pursuant to this section shall ensure responsible data center decommissioning in a manner that protects and preserves the environment and the public health and welfare shall include standards and procedures that address approval of the decommissioning plan by the appropriate regulatory entity. There was conversation about should it be the PUC, should it be ANR, Landy's Review Board, regulatory oversight of the decommissioning process, including through site visits and inspections a bond requirement or other financial assurance to ensure a data center is solely responsible for the costs associated with implementation of an approved plan, guidelines for data sanitization, the physical destruction of highly sensitive storage devices, and a documented chain of custody information technology assets, guidelines for environmental compliance, hazardous material handling, environmental remediation, and site restoration, timeline for when you have to commence the decommissioning, and also complete the decommissioning and any other matters. And then you will get that recommendation this year, in December in the form of draft legislation.

[Representative Amy Sheldon (Chair)]: How was the decommissioning addressed Vermont Yankee? Not now in real time, but when the permits were issued.

[Maria Royal (Legislative Counsel)]: I would have to look. I don't know.

[Representative Amy Sheldon (Chair)]: So that didn't come up in this discussion. Okay.

[Michael Grady (Legislative Counsel)]: I will tell you that part of the decommissioning and the regulation by the state was subject to litigation and whether or not the state was preempted from the type of regulation it tried to require ANCADE because the Atomic Energy Act preempts state regulation of the operation of nuclear facilities, but states have the ability to regulate the environmental health and landings and things of that nature.

[Representative Amy Sheldon (Chair)]: And is that the case for other federally permitted, like, FERC dams? I guess it seems like we're in that kind of same in in between place with the data center potentially.

[Michael Grady (Legislative Counsel)]: Well, it depends on the preemption clause, and I don't believe that there's a specific preemption clause for data centers.

[Maria Royal (Legislative Counsel)]: Not currently. What's that? Not currently.

[Representative Amy Sheldon (Chair)]: No. Currently, but there may be at some point. Yeah.

[Maria Royal (Legislative Counsel)]: It's possible. Yep. It's possible. Alright.

[Representative Amy Sheldon (Chair)]: Members have any other questions?

[Maria Royal (Legislative Counsel)]: Okay.

[Representative Amy Sheldon (Chair)]: Thank you both. You're welcome. Thank you. Folks present, we're gonna need to I I hope I hope we will be asked on the floor, I think, potentially. Anyway, I'd like to do a straw poll on our changes to this bill or maybe on the bill as it exists out of the draft we're looking at right now. Ela's joining us. I assume two other members aren't here. First or uncle, we can ask them how they would vote separate from being present. So are folks feeling supportive of these changes? In? Canelo Canelo in?

[Maria Royal (Legislative Counsel)]: Yes, I'm happy with the bill.

[Representative Amy Sheldon (Chair)]: Yeah, I'm quite pleased that they've taken our suggestions, and I feel like we did the best we could with the time we had. Think the side by side that Maria provided of the changes around the land use would be a good thing to review in your spare time, just as a comparison or just to see. I think it was great they called the LERB and got that input directly from them on the criteria that would not be covered in the policy process or would be covered in the land use review process. So all those who support this, h seven two seven as amended by the House Energy Committee? Raise your hand. I'm seeing everyone present. Two two are absent. That's nine right now in favor. Thank you all. Alright. With that, we'll take a couple minutes break and transition to our next topic at the top of the hour.