Maine Governor Rejects First-in-Nation Bill Pausing Data Centers

Maine Gov. Janet Mills (D) vetoed a bill that would’ve imposed a short-term moratorium on data centers, stopping the state from becoming the first in the US to enact a broad ban on the fast-growing sector.

The bill would’ve prohibited state and local agencies from accepting applications allowing the operation or construction of new data centers with loads of at minimum 20 megawatts until Nov. 1, 2027. Mills said she vetoed the legislation because the bill didn’t make an exception for a project proposed in Jay, Maine, a municipality that’s struggled to attract new investment and replace jobs lost by the closure of a local paper mill.

“This project – which is now under contract and which has received several permits – is expected to create more than 800 construction jobs, at least 100 high-paying permanent jobs, and would contribute substantial property tax revenue to the Town of Jay,” Mills said in a veto letter Friday, noting the town, regional chamber of commerce and county commissioners have told her they’re supportive of the $550 million project.

“The project developers are committed to revitalizing the mill site by utilizing its existing industrial buildings, water, and electrical infrastructure to avoid the adverse impacts cited in the bill, including impacts to ratepayers,” added Mills, who used to live in the county that includes Jay.

The governor said she would’ve signed the bill if it didn’t apply to the Jay project and that she still thinks “a moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates.” She said she plans to issue an executive order to create a council to study the effect of the industry on the state, something that the vetoed bill also included.

Rep. Melanie Sachs (D), the bill’s sponsor, had said her goal in proposing the bill was to give state lawmakers and officials time to author needed regulations for the data center industry, so as to avoid situations in other states where the sector’s growth has outpaced policy.

Sachs, in a statement Friday in response to the governor’s veto, said the state’s task force on artificial intelligence recommended the state come up with a plan for how to respond to data center projects and her bill “would have done exactly that.”

“While a veto might protect the proposed data center project in Jay, it poses significant potential consequences for all ratepayers, our electric grid, our environment, and our shared energy future,” said Sachs, who chairs the Joint Committee on Energy, Utilities, and Technology in the legislature. “This decision is simply wrong.”

The industry pushed back against the legislation, including the Maine State Chamber of Commerce which asked the governor to veto the bill. While no state in the US has enacted a full-blown moratorium on data centers, some localities across the US—including in Maine—have taken such steps as opposition to data centers has spread.

While Mills vetoed the moratorium bill, she signed another piece of legislation that bars data center projects from accessing business development tax incentives the state offers, her office said in a press release.