Maine's Democratic governor Janet Mills on Friday vetoed legislation that would have made the state the first in the nation to impose a moratorium on large new datacenters, citing a specific project that she said deserved protection despite her broader support for limiting such facilities.
The vetoed bill would have halted approvals for datacenters consuming more than 20 megawatts of power until October 2027, while a state council studied their effects on the electrical grid, energy costs, air quality, and water resources. The freeze reflected growing alarm among lawmakers and residents over the environmental toll and rising electricity bills from facilities that power artificial intelligence systems and other cloud services.
In her veto letter, Mills acknowledged that "a moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates." But she said the bill's blanket approach would have blocked a $550 million datacenter project in the town of Jay that she described as essential to local recovery.
Jay had lost hundreds of jobs in 2023 when an Androscoggin paper mill shut down following a boiler explosion. The planned datacenter project would repurpose existing mill infrastructure and was projected to generate more than 800 construction jobs, at least 100 permanent positions, and significant property tax revenue for the town. Mills emphasized that the facility had "strong local support from its host community and region."
The governor's action highlights the collision between environmental and economic concerns that now confronts state leaders across the country. Tech companies are spending heavily on datacenter buildout as artificial intelligence deployment accelerates, with the industry committing more than $600 billion to such projects this year alone. Yet the power demands of these facilities have sparked backlash in communities worried about strains on electrical infrastructure and higher utility bills.
At least a dozen states are considering legislation to slow or block datacenter development. Virginia, already a global datacenter hub, is among those weighing similar measures. The Trump administration has meanwhile pressured states to avoid regulating AI infrastructure, while major tech firms signed a voluntary White House pledge to pay for new power generation needed to support their datacenters.
Mills indicated she would pursue alternative approaches. She plans to issue an executive order creating a council to assess datacenters' Maine impact and has already signed legislation barring datacenter projects from state business development tax incentives.
Melanie Sachs, the Democratic state representative who sponsored the bill, called Mills' veto "simply wrong." She warned that blocking the moratorium would expose Maine ratepayers to "significant potential consequences" for electricity costs, grid reliability, and environmental protection, and undermine "our shared energy future."
Author James Rodriguez: "Mills had a genuine dilemma, but punching a hole in the state's first real datacenter restraint for one project opens the door wider than she probably wants it to open."
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