Vermont Legislature SmartTranscripts:

[Sen. Ann Cummings (Chair)]: Live. Live. We are live. Okay. We are having issues. I've put committee discussion, the passcode on the end, but I didn't realize we had committee discussion for the first half hour also. We are approaching crossover. 248a came to us today. I'm not gonna take that up until after crossover. That's in age. Captive insurance is out It says we got to ask Maria to come in. We'll vote it out. I've asked Maria to come in, bring us section by section and just walk us through. Believe that's coming this week. Up there.

[Unidentified Committee Member (Senate Finance Committee)]: Is that $2.48? It's related to two forty eight?

[Sen. Ann Cummings (Chair)]: It's related to the two forty eight a rule. The sunset is up in July. So I have a bill in here that would abolish the sunset.

[Unidentified Committee Member (Senate Finance Committee)]: I

[Sen. Ann Cummings (Chair)]: was told at a meeting with the house chair yesterday that what's coming to us is a four year extension and

[Unidentified Committee Member (Senate Finance Committee)]: a

[Sen. Ann Cummings (Chair)]: study. It seems to be a lot of concern from the public that the PUC process is difficult for them to access, to interact with, so there's gonna be a couple things in there like requiring now towns may have a public hearing. Mhmm. Requiring that there'll be a public hearing and that the PECHenden, but we will go over that after town meeting. That is here. K. What I'd like to get out, and I was asked today by waiting meetings if we're gonna get it out by crossover, and I said no. I was waiting for the miscellaneous tax. Is looking at all the kind of tax bills we've got in the tax code, I know there's a lot of concern that we're not collecting enough from the upper bracket, and we've got a couple bills that will crack more. I think the biggest thing we're gonna do is we have passed the second homes tax and that will be coming over to us in, I believe, the miscellaneous tax bill, and that would be an adjustment of those rates. Remember, everybody paid one, but if we adjusted to non homestead residential, like to 1.2 or 1.01, that would be a higher payment by second homes, but that is there. I probably told you, I'm starting to say we have a fairly high top tax bracket, but it starts at a fairly low rate. Dollars 300,000 isn't a lot of money if you are trying, this is for couples filing jointly, that isn't a lot of income if you look at two working people in any kind of a profession. We're hearing a lot about having a really difficult time attracting primary care doctors and even specialty doctors. Think about it, you could work at Dartmouth, so you have the Dartmouth name on your resume and pay no income tax, or you could move to Vermont and work at North Country or Gifford pay one of the highest income tax rates in the country, and when you add that a fair number of your patients are probably going to be on Medicaid, anybody that has an accountant can figure out that you have to be really dedicated to come work here. But it so I'd like I don't know if we need to look at breaking out. We've collapsed those top two tax brackets six years ago in order to be more competitive with the rest of New England. I don't think that's worked. So I like to investigate if there's a way to kind of maybe put the fifth bracket in to adjust to the rate so that we are not discouraging professionals from moving here and at the same time look at can we move that top bracket up. We also got Senator Bill that went back over the testimony, but it seems that there's different thresholds and things from the federal bill and if we could get them to line up it would be much easier for everybody to administer what you were doing, and I'd also like to look at that 200,000 threshold because 200,000 was set in 2013 and it definitely doesn't have the buying power now than it did in 2013. That's what I'm looking at at this point. I think we've got the other rules and meals tax. I think other committees are also looking at that for things like housing. We're going the governor's proposing moving $10,000,000 out of the Ed Fund and then putting general fund in for this year only. I think the budget people are just gonna do 10,000,000 from the general fund to the end fund and not start the precedent of removing an additional $10,000,000 a year out. You mean 10,000,000 to the transportation From that general fund. Not including the Ed fund and the whole. Not including the Ed, not putting it in and then taking it out. That's what

[Unidentified Committee Member (Senate Finance Committee)]: Can I

[Sen. Ann Cummings (Chair)]: ask a question? Yeah. So your idea about the bracket, the income tax brackets, can, do we have some analysis by JFO on that yet? I'd love to see the data because I you've got your budget. I'm really If you have a sheet, and I will have Patrick bring it back. I first did it to moving it to 400. I thought 500 to start a top racket might be better. Would like yeah. I'd like to keep it at least revenue neutral for Well, would like I just wanna see where we haven't had we've only talked about it in theory, not in actual Right, getting up and I first left to do that. A breakout and I know he's working on other things, and so I'm gonna, I'll have him come in and talk to us about that. That would be great.

[Unidentified Committee Member (Senate Finance Committee)]: So similarly, I'd love to know when we see those brackets, were they just set in stone or do they automatically adjust? Do they sync with the brackets?

[Sen. Ann Cummings (Chair)]: They adjust for I mean, one number I got was $2.94.

[Unidentified Committee Member (Senate Finance Committee)]: Yeah.

[Sen. Ann Cummings (Chair)]: Now it's up to three o something. They automatically adjust for inflation. Okay. So we don't set them every year like we attach to the feds every year. There is an automatic, I assume a deflator, if anything ever deflates, but they do adjust automatically up.

[Unidentified Committee Member (Senate Finance Committee)]: But We should know that.

[Sen. Ann Cummings (Chair)]: I'm just no. I we haven't looked at the tax codes, the the first jobs cut, and that wasn't even that was the code. We were we made $30,000,000 from a tax cut bill.

[Unidentified Committee Member (Senate Finance Committee)]: 2016 or Yeah. Was that '20

[Sen. Ann Cummings (Chair)]: That was '16, right? Yeah. And so completely decoupled from the Feds then and did our present tax code. Basically the 30,000,000 seemed to have come from middle class people which wasn't our goal. So we reattached it and redid it. And there's still things out there. There was a biggest concern was when we did our deductions. We didn't, we had one standard deduction and it was the charitable deductions that every cultural organization in the state was sure that you, if you couldn't deduct on the state tax, you could still deduct it all on the federal tax, but if you couldn't do it on state tax, then people would stop giving. I haven't heard anymore, so I assume that didn't happen, but we were so focused on that we missed medical deductions, and that didn't get you didn't get a separate medical deduction here. So we did get that on second year, but it is convoluted. We weren't getting help from the other body on that one, but we did get a medical deduction in. So that is where we are. So we I thought Johnson was coming today. We're trying to figure out on the AI data centers, and we ah, there he is. Welcome.

[Unidentified Committee Member (Senate Finance Committee)]: You're waiting for me. Perfect.

[Sen. Ann Cummings (Chair)]: Well, I think we're having for some reason, maybe it's because Martine Larocque's last night, they're not getting very many witnesses today. I don't know why, but you can have the comfortable chair.

[Unidentified Committee Member (Senate Finance Committee)]: Okay.

[Sen. Ann Cummings (Chair)]: Anyone that testifies in health and welfare is envious of that chair. The health and welfare chair is going to collapse on the floor on one of these days. It creeps. So anyway, we're looking at this moratorium on AI data centers and we've heard that other states are having issues, some of them are regretting the incentives, the tax credits, that there's issues with the amount of electricity would be in your field, water, and I guess the first question is, we know we've got three, I think, centers, not the huge 20 acre ones, but smaller ones. Do you have the ability to control if they came in and wanted to use 50% of the grid? I mean, you have the ability to say no, you can't have that much, you need to develop your own energy source, do you, Does the PUC have the power they need?

[Greg Faber (Vermont Public Utility Commission)]: Yes. For the record, I'm Greg Faber with the PUC. So I guess the short answer is, yeah, we do. So this bill so you have your moratorium section up front, and then it goes into it requires us to do a wide ranging investigation, which there's no appropriation in here for and we have no expertise So, there's a house bill as you may or may not be aware of, page seven twenty seven I believe, is that right? Yeah. Think so. And what that bill does is it focuses on our existing authority under interconnection agreements and special contracts. Special contracts being the contract between the utility and the large load, like a ski resort. Think ski resorts. They use a ton of power. Utilities have special contracts with them, which we need to review and approve or or not. And also the interconnection, if they have to build a new transmission line, transformers, that type of thing, we're gonna review all of that as well. As far as the actual siting of basically a warehouse that uses water, maybe a lot of water, that should go through the town in Act two fifty as it normally does today in sort of building like that. Or a ski resort, we don't regulate the ski resort, but we regulate their connection to the grid. So that's how we envision working with that. And H seven twenty seven, we added language to that to address this specific data center problem or diverting. That's yes that's my it should be on that.

[Sen. Ann Cummings (Chair)]: I had heard yesterday that there was a bill I think headed this way by crossover.

[Greg Faber (Vermont Public Utility Commission)]: Think so. Yeah.

[Sen. Ann Cummings (Chair)]: And that that some people were concerned are concerned or looking at the former Vermont Yankee site for Oh, for news. For a data center. There were a lot of transmission and Yeah. Lines and connections that went in there, which might make it a logical site.

[Greg Faber (Vermont Public Utility Commission)]: There's also a solar site being discussed right there. Okay. So that might use up some of that.

[Sen. Ann Cummings (Chair)]: Yeah. Who knows? Yeah. But I think some people were concerned that that's a big open place that I would try to set up. Can

[Unidentified Committee Member (Senate Finance Committee)]: I elaborate on the process you're outlining? So let's say somebody wants to build a 100 megawatt, which is what they typically start at, they can go up to 500 megawatt AI data center, through, find a town, they go through the local process, go through Act two fifty, and then where does that intersect with, would it by default intersect with the PUC and would you be able to quite cleanly say no we don't support, you can't draw that much power off the grid? Do you have that authority today to tell them that we've got that?

[Greg Faber (Vermont Public Utility Commission)]: So likely that that facility would have to negotiate a special contract with the utility that we would have to review and approve or not. So yes, we do have that authority to say no, this special contract doesn't make sense. Likely the utility would inform the facility well beforehand because obviously if you're coming in with that size load, you're going to talk to the utility first because you're going to need their

[Unidentified Committee Member (Senate Finance Committee)]: their infrastructure. And this is some this is something you do. So with ski resorts, you look at these contracts and you can recall when you've said no in the past?

[Greg Faber (Vermont Public Utility Commission)]: I don't know that we've said no. It's in ski resorts, and they were done a long time ago. So I personally don't even have any involvement in those, but we do have special contracts. Global foundries before it was a utility, they had a special contract. It's it's, you know, we don't have a great number of large loads in Vermont but that is the process and interconnection as well and obviously you're gonna have to pay for any the user is gonna have to pay for any upgrades to the grid So that could be millions and millions of dollars, right? So that's the utility will perform what's called a system impact study, and that will outline all the upgrades that are necessary. They do this for all solar projects as well. I mean, obviously the power's going the other way in that case, but they'll perform a system impact study that will say, look, you gotta build five new transformers. We gotta bring in a transmission line. It's gonna cost you x amount. You need to pay us for that. And then sure, we'll we'll go ahead and do that, but we're gonna need all these upgrades to our system in order to connect you. And that might stop a project right there. We don't even look at that at that point. But once they do agree with that, then we look at that as part of our review of the interconnection agreement.

[Sen. Ann Cummings (Chair)]: I think Global Foundries got in years ago.

[Greg Faber (Vermont Public Utility Commission)]: Well, it was years ago. Yeah. But when they were first when they arrived, yeah.

[Sen. Ann Cummings (Chair)]: Yeah. They're much smaller, but that was an ongoing issue because they were always being compared to fish kill in New York, and New York provides lower rates for industrial power and I just soon finally did let them become their own utility and they buy their own electricity somewhere.

[Greg Faber (Vermont Public Utility Commission)]: They produce a lot of it.

[Sen. Ann Cummings (Chair)]: Yeah. So that's

[Greg Faber (Vermont Public Utility Commission)]: I'm curious, how produce? Do They have solar sites. So solar is their main production. They have a ton of solar, yeah. On campus, off campus type of thing. Around. Yeah.

[Sen. Ann Cummings (Chair)]: Okay.

[Unidentified Committee Member (Senate Finance Committee)]: Yeah.

[Sen. Ann Cummings (Chair)]: I don't get around.

[Greg Faber (Vermont Public Utility Commission)]: Yeah. That's what large. You think a lot of acreage. So Yeah. Yeah. Okay.

[Sen. Ann Cummings (Chair)]: Okay. When they started, they solar wasn't what it is today. So that one has worked out, and hopefully it's good too.

[Unidentified Committee Member (Senate Finance Committee)]: Okay, by the time since you started early, I'm going to ask you another one, of course. What do you understand about this type of facility that would demand such power? Do you think Vermont has an attractive market from a rate and regulatory stance that would be drawing interest from AI data center developers to want

[Greg Faber (Vermont Public Utility Commission)]: to build them here? Well, if you put it under our jurisdiction, that's a more expedited process than Act two fifty. And so you probably don't want to do that if you want to slow this development down. You want speed it up because we're one stop shopping. Know if you're going through the town in Act two fifty and then to the environmental court potentially

[Sen. Ann Cummings (Chair)]: They'd three have to do that if it's using water, right? You can't do a one stop shop if they're

[Greg Faber (Vermont Public Utility Commission)]: Oh, they come to us we would review their impacts on water just like we do now for every other project.

[Sen. Ann Cummings (Chair)]: And then and that would get them around Act two fifty?

[Greg Faber (Vermont Public Utility Commission)]: Yes. As you know we incorporate most of the Act two fifty criteria in our regions like every solar project they put in information on water. You know they don't use it.

[Sen. Ann Cummings (Chair)]: They don't use it.

[Greg Faber (Vermont Public Utility Commission)]: But that's the information they provide. Just for example, obviously the facility is using water, a substation. Sometimes they put it in restrooms at substations.

[Sen. Ann Cummings (Chair)]: No good.

[Greg Faber (Vermont Public Utility Commission)]: You may not notice that. Sometimes there's restaurants for the people who work there. Yeah. And they use water, and they have to put in evidence on how much water we're gonna use, in fact, existing water supplies. So we get all that information now.

[Sen. Ann Cummings (Chair)]: Oh, okay. But

[Greg Faber (Vermont Public Utility Commission)]: actually, 50 gets the same. It would get the same.

[Sen. Ann Cummings (Chair)]: What about building the actual facility? You don't oversee the facility building as part

[Greg Faber (Vermont Public Utility Commission)]: of We wouldn't have unless you change the larger state. I don't want to. I wouldn't recommend that.

[Sen. Ann Cummings (Chair)]: Absolutely not. I mean, I think a facility this large that would have this much impact should go through the review of both the PUC and Act two fifty as relevant. I

[Greg Faber (Vermont Public Utility Commission)]: agree. As well as the town.

[Sen. Ann Cummings (Chair)]: And the town, of course, yes, because there are traffic impacts.

[Greg Faber (Vermont Public Utility Commission)]: So they're looking at the building, we're looking at the intersection. And that makes sense to us.

[Sen. Ann Cummings (Chair)]: And that's under our current regulatory system

[Greg Faber (Vermont Public Utility Commission)]: without us having to change That's right.

[Sen. Ann Cummings (Chair)]: Thank you. Okay.

[Greg Faber (Vermont Public Utility Commission)]: Yeah. This bill was kind of changing that was the opening investigation for us to look at all that stuff. So we were a little concerned about that and the bill upstairs was doing the same thing and we asked them to change it so it's more focusing on the interconnection the special contract aspects.

[Sen. Ann Cummings (Chair)]: But it doesn't talk about the land use Act 50?

[Greg Faber (Vermont Public Utility Commission)]: No, that would just go through Act two fifty just like it would today.

[Sen. Ann Cummings (Chair)]: We're trying to get an ANR in.

[Greg Faber (Vermont Public Utility Commission)]: An ANR would look at all the criteria just like they do in our cases and in Act two fifty cases, and obviously it's kind of a unique animal, but it is in the end it's just a building that uses a lot of power and water. The one thing that is attractive to data centers that I've heard up here is we have a lot of fiber. We have a good fiber backbone and that's something attractive to data centers and AI data centers dramatically.

[Sen. Ann Cummings (Chair)]: Because we just Broadband, that's based on the band sharing. Oh, that type of fiber. Yes.

[Greg Faber (Vermont Public Utility Commission)]: We have a lot of fiber, yeah.

[Sen. Ann Cummings (Chair)]: Yeah.

[Greg Faber (Vermont Public Utility Commission)]: So that could be attractive to

[Sen. Ann Cummings (Chair)]: a data center. Okay. I was thinking fiber boards because we made a lot of

[Greg Faber (Vermont Public Utility Commission)]: Yeah, those fiber backbone. But otherwise our rates aren't the low. They're the lowest in New England, but they're not the lowest in the country, that's for sure. So

[Sen. Ann Cummings (Chair)]: No. But We are still a regulated utility, which your part of New England is a good part of that. That's

[Greg Faber (Vermont Public Utility Commission)]: right. And rates are gonna go up.

[Sen. Ann Cummings (Chair)]: Yeah. So

[Greg Faber (Vermont Public Utility Commission)]: not too worried that will seem to be big ones here, but it's possible. More concerning is large data centers in New Hampshire, let's say, then we're starting to pay for transmission upgrades if that happens. We're on the lookout folks for

[Sen. Ann Cummings (Chair)]: said, because I asked them, I meant they came in to say hi, and I asked if they put up data centers in Massachusetts, are we going to have to pay to run the transmission lines? And they said no, that the companies would have to pay for anything to connect, but then That's true. Then we would be on the hook x number of years from now for maintenance and upgrades.

[Greg Faber (Vermont Public Utility Commission)]: That's right.

[Sen. Ann Cummings (Chair)]: So initially, we won't see a big hit, but if they do put but they'll that'll happen if they put anything in that uses a whole bunch of a lot That's right. Off the grid. That but New England will also pay its share of upgrading whatever gets put in here.

[Greg Faber (Vermont Public Utility Commission)]: That's right. Yeah. Yeah.

[Sen. Ann Cummings (Chair)]: So because that was something I had thought about. Well Mhmm. We could get hit and not get any of the benefits.

[Greg Faber (Vermont Public Utility Commission)]: That's right.

[Sen. Ann Cummings (Chair)]: I assume these aren't huge employers, though.

[Greg Faber (Vermont Public Utility Commission)]: Sounds like I don't know. It sounds like a big warehouse full of servers to me. Yeah. Yeah. Someone's gotta watch it.

[Sen. Ann Cummings (Chair)]: Somebody's watching it, but not like a manufacturing plant where there's no. A lot of people.

[Greg Faber (Vermont Public Utility Commission)]: Some maintenance got to keep the temperature right I guess. I don't know much about it.

[Sen. Ann Cummings (Chair)]: Yeah but it sounds like there's a bill that they've worked through some

[Greg Faber (Vermont Public Utility Commission)]: of these issues. Yeah submitted comments and the department submitted comments on that bill as well. So I would urge you to take a look at that one. Okay. This bill, not thrilled about it, but the other one is fine.

[Sen. Ann Cummings (Chair)]: The other one has done a better job? Well, they just worked on it. They worked on on in this the workplace that they I emptied the full day, and they love it in scope. Mhmm. Scope. They don't have to deal with school taxes and other things. Okay. Health insurance. Oh, k. It's done. This is good.

[Greg Faber (Vermont Public Utility Commission)]: Alright. Thanks, folks. Thank you.

[Sen. Ann Cummings (Chair)]: Okay. We are out until 02:45 unless you're good. So I know. We've had

[Unidentified Committee Member (Senate Finance Committee)]: Spoiling us with