Maine Governor Janet Mills has vetoed a bill that would have made the state the first in the US to impose a moratorium on large new datacenters, highlighting the difficult balance between environmental concerns and economic benefits.
Veto Decision
On Friday, the Democratic governor rejected the legislation, which aimed to freeze approvals until October 2027 for datacenters requiring more than 20 megawatts of power. The bill would have allowed a state-appointed council to analyze 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 on datacenter projects, but said she would have signed the bill if it had exempted a specific project in the town of Jay. This project is crucial for jobs and tax revenue in the area.
Economic Context
The Androscoggin paper mill in Jay shut down in 2023 after a boiler explosion, leading to hundreds of job losses. A proposed $550 million datacenter, which would reuse existing infrastructure and have minimal impact on the electric grid or 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 the impact of datacenters in Maine and has signed a bill to exclude datacenter projects from the state's business development tax incentive programs.
National Context
US tech giants have committed over $600 billion on AI datacenters this year, boosting the economy but also sparking opposition. More than a dozen states are considering legislation to halt or restrain datacenter development, even as the Trump administration pressures states to avoid AI regulation. Virginia, a major datacenter hub, is among those weighing similar measures.
To address concerns about rising electricity bills, big tech companies signed a voluntary pledge at the White House to bear the cost of new electricity generation for their datacenters. Two Democratic federal lawmakers, Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez, have introduced legislation to halt all datacenter construction until Congress passes AI safety legislation.
Local Reactions
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 called Mills' veto "simply wrong," stating that while it might protect the Jay project, it poses significant consequences for ratepayers, the electric grid, the environment, and the state's energy future.
Limiting datacenter development would have added economic pressure on a rural state already dealing with mill closures that have eroded a key industry.
