Lawmakers in Vermont are deliberating a bill that would impose a temporary ban on the construction of artificial intelligence (AI) data centers until July 1, 2030. The proposed legislation, known as S.205, seeks to assess the environmental impacts of these facilities on the state’s power grid and water supply. If passed, the bill would prevent the establishment of data centers that require more than 100 megawatts of electricity during the interim.
Environmental Concerns Drive Legislative Action
The Vermont Public Utility Commission would be tasked with investigating the potential effects of AI data centers and providing recommendations to lawmakers by January 15, 2027. Senator Rebecca White, a Democrat representing Windsor, emphasized the bill serves as a necessary pause rather than a permanent ban. “This is a common sense pause on development when we are experiencing an exponential growth in an unregulated market,” White stated during a Senate Committee on Finance meeting.
AI data centers, which house essential infrastructure for managing AI models, often occupy large warehouses and require extensive cooling systems that use substantial amounts of water. White highlighted that these centers can consume up to 5 million gallons of fresh water daily, a volume comparable to that used by a town with a population between 10,000 and 50,000 residents, such as Burlington, South Burlington, and Colchester.
Currently, Vermont does not have any AI data centers that meet the 100-megawatt threshold, although smaller facilities are operational. White expressed concern over the potential for a fragmented regulatory landscape, as some municipalities are already developing their own bans. “I’m nervous that we’re going to end up with a patchwork of municipal regulations if we don’t say there’s a plan in place,” she noted.
Debate Over Economic Impact and Industry Regulation
The Senate Committee on Finance received insights from Nicholas Miller, a policy associate with the National Conference of State Legislatures, regarding the economic implications of AI data centers. While these facilities can create up to 1,500 jobs during construction, Miller indicated that the number of permanent positions typically drops to between 10 and 50 once they become operational.
Senator Scott Beck, a Republican from Caledonia, raised questions about the necessity of a moratorium. He argued that Vermont lacks sufficient knowledge about the industry to implement such a measure and pointed out that other states have required AI companies to generate their own power to alleviate burden on local grids. “This is like an effort to turn away somebody that hasn’t even tried to enter the state,” Beck remarked.
The issue of federal intervention also looms over the discussion. In December 2025, then-President Donald Trump signed an executive order titled “Ensuring a National Policy Framework for Artificial Intelligence,” which restricts states from imposing regulations on AI. White expressed concern that the passage of S.205 could provoke federal backlash.
As discussions continue, Vermont lawmakers have yet to cast their votes on the bill. The outcome will likely shape the future of AI data centers in the state, balancing economic opportunities with environmental considerations.