Maine Governor Janet Mills has vetoed legislation that would have made her state the first in the US to impose a moratorium on large new datacenters. The decision, announced on Friday, underscores the delicate balance political leaders must strike between environmental concerns and economic benefits.
Bill Details and Veto Rationale
The proposed bill would have frozen approvals until October 2027 for datacenters requiring more than 20 megawatts of power, while a state-appointed council studied their impact on the local grid, electricity bills, air, and water. In a letter to the Maine legislature, Mills expressed support for a temporary moratorium but objected to the bill's lack of an exemption for a datacenter project in the town of Jay. She stated, "A moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates. But the final version of this bill fails to allow for a specific project in the Town of Jay that enjoys strong local support."
Economic Context in Jay
The Androscoggin paper mill in Jay shut down in 2023 after a boiler explosion, resulting in hundreds of job losses. A proposed $550 million datacenter, which would reuse existing infrastructure and have minimal impact on the electric grid and energy bills, is expected to create over 800 construction jobs and at least 100 high-paying permanent positions, along with property tax revenue for the town. Mills plans to issue an executive order establishing a council to examine datacenter impacts and has signed a bill prohibiting datacenter projects from Maine’s business development tax incentive programs.
National Context and Opposition
US tech giants have pledged over $600 billion on AI datacenters this year, fueling economic growth but also sparking opposition. More than a dozen states are weighing legislation to halt or restrain datacenter development, even as the Trump administration pressures states to avoid AI regulation. Virginia, a major datacenter hub, is considering similar measures. To address concerns about rising electricity bills, big tech companies signed a voluntary White House pledge to bear the cost of new electricity generation for their datacenters. Federal lawmakers Bernie Sanders and Alexandria Ocasio-Cortez have also introduced legislation to halt datacenter construction until Congress passes AI safety legislation.
Local Legislative Response
Maine lawmakers passed the bill last week, sponsored by Democratic state representative Melanie Sachs. The state was seen as a test case for such measures. Sachs criticized Mills' veto, saying, "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." Limiting datacenter development would have added economic pressure to a rural state already dealing with mill closures that have eroded a key industry.
