Maine Lawmakers Pass First-in-Nation Data Center Moratorium

The Maine legislature passed a bill Tuesday imposing a temporary moratorium on new data centers, making it the first US state to do so amid nationwide pushback against the projects.

The bill, LD 307, which Gov. Janet Mills (D) has 10 days after receiving it to act on, would temporarily bar new data centers with loads of at least 20 megawatts until Nov. 1, 2027. State Rep. Melanie Sachs (D), the bill’s sponsor, said her aim is to give state officials and lawmakers time to consider policies and regulations around data centers. She also said she wants to avoid running into situations like those in other states where the industry’s growth has outpaced policy.

“The beauty, I think, of this bill is to really take the lessons of what we’ve seen from the states around what happens with unfettered rapid development,” said Sachs, who chairs the legislature’s Joint Committee on Energy, Utilities, and Technology. “They’re now trying to claw back or change or retroactively put in place some policies.”

“Maine has the opportunity to put that comprehensive framework in place to evaluate any trade-offs that we may want,” she added.

Sachs’s legislation also calls for the creation of the Maine Data Center Coordination Council, which would “provide strategic input, facilitate coordinated state planning considerations and evaluate policy tools to address data center opportunities and related benefits and risks.”

The 14-person council would be tasked with “protecting ratepayers, maintaining electric grid reliability, minimizing environmental impacts and enabling responsible and appropriately sited economic development,” according to the bill, which also says the group would need to consider the state’s climate goals.

Industry’s Response

Many states that tried to encourage data center development with tax incentives have in some instances paused those types of deal sweeteners or considered imposing restrictions around data center development. State lawmakers in South Dakota and Vermont are among those proposing legislation to institute temporary moratoriums on data centers.

Industry, meanwhile, argues Sachs’s bill isn’t business friendly and will dampen the economic advantages that come with data centers. In a letter addressed to the governor encouraging her to veto the legislation, Maine State Chamber of Commerce President and CEO Patrick Woodcock said the bill “would make Maine an outlier” and risk the state’s “ability to compete regionally and nationally.”

Woodcock mentioned a data center proposal in Jay, Maine, a city of fewer than 5,000 people, that he says would help the area economically after a paper mill closed and caused a drop in tax revenue and job losses.

“For communities like Jay, projects like this are not just investments — they are a path to good-paying jobs, new tax revenue, and renewed economic opportunity and stability,” he wrote, adding that “while the Chamber recognizes the importance of thoughtful planning and responsible development, a blanket moratorium is not a balanced approach.”

Press representatives from the governor’s office didn’t respond to a request for comment about her plans. But Maine Public reported that earlier this month, Mills told reporters the bill needed a carve-out to allow the project in Jay to go through.

Sachs said she hasn’t talked to Mills about the bill, but she worked with her administration as it made its way through the Statehouse.

Dan Diorio, vice president of state policy at the Data Center Coalition, said the bill “would discourage investment and send a signal that Maine is closed for business.”

“It would deprive local communities of the opportunity to compete for investment and jobs, while forcing Maine to relinquish significant long-term economic investment (especially in rural and industrial areas seeking growth and revitalization), high-wage jobs, and critical tax revenue to neighboring states,” Diorio said in an emailed statement.

Local Pushback, Engagement

Sachs said data center developers might be drawn to the state because its energy rates, while higher than other places in the US, tend to be comparatively lower than elsewhere in New England. The state also has “abundant natural resources, cooler climate, and not always strong local permitting.”

“At the same time, we have to be very careful of rate payer impact and stewardship of natural resources,” she said.

Some localities in the state have already tried to slow or quash data center development on their own. The Bangor City Council on Monday passed its own temporary six-month moratorium on data center development, according to the Bangor Daily News, with one council member citing the lack of a state-level “policy framework” to help the city stand up local regulations.

Sachs also said because Maine is a home rule state, there are few zoning regulations that span across the state, but otherwise, communities can impose stricter land-use permitting restrictions.

Maine isn’t an anomaly in turning to a moratorium. Port Washington, Wis., a city of roughly 13,000 people, passed a referendum last week mandating major projects awarded tax benefits be approved by locals. The Tulsa, Okla., city council last month imposed a nine-month moratorium on data center construction, according to the Tulsa Flyer.

One issue that’s come up in Maine and in other states is the secrecy around these types of projects. Multiple data center projects surfaced after she proposed her bill, Sachs said.

“I’m hopeful that this process will encourage any project to engage with communities,” Sachs said. These projects don’t just impact localities, she added. “It is regional and statewide impact when they come in.”