Gov. Janet Mills vetoed a bill Friday that would have made Maine the first state to impose a moratorium on large new data centers, even as local opposition to the electricity-hungry facilities grows.
The decision reflects the difficult trade-off facing political leaders who must weigh the impact of data centers on the environment and energy bills against the revenue they can bring. It comes at a sensitive time for Mills, who is also a Democratic U.S. Senate candidate who is running an underdog primary campaign against progressive political newcomer Graham Platner.
If signed into law, the bill passed by the Democratic-led Legislature would have frozen approvals until October 2027 for data centers requiring more than 20 megawatts of power while a state-appointed council analyzed their impact on the local grid, electricity bills, air and water.
Mills, in a letter to the Maine Legislature, said she supports a temporary moratorium on data center projects and would have signed the bill if lawmakers heeded her call for an exemption for the data center project under way at the former International Paper mill site in Jay.
“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 [Jay] that enjoys strong local support from its host community and region,” she said in a statement.
The Androscoggin paper mill in the town shut down in 2023 after a boiler explosion, leading to hundreds of job losses. Work to develop a $550 million data center, which reuses existing infrastructure that would not have had a major impact on the electric grid or energy bills, is expected to create more than 800 construction jobs and at least 100 high-paying permanent jobs, and would contribute property tax revenue to the town of Jay, Mills said.
Mills also said that she plans to issue an executive order establishing a council to examine the impact of data centers in Maine and has signed a bill to prohibit data center projects from Maine’s business development tax incentive programs.
The governor has never had a veto overturned by the Democratic-led Legislature, something that takes two-thirds votes in both chambers. The Maine House of Representatives voted 115-29 against a Jay carveout, but Republicans are likely to back Mills up when they reconvene on April 29 in part because a party leader is trying to keep a Sanford project on track.
American tech giants have pledged to spend more than $600 billion on artificial intelligence data centers this year as part of a spending spree that has boosted the U.S. economy and is considered the biggest since the telecom boom of the late 1990s.
But mounting opposition to that buildout has led more than a dozen U.S. states to weigh legislation that would halt or restrain development of the facilities, even as the Trump administration pressures states to stay out of AI regulation.
To ease worries about rising electricity bills, Washington last month got big technology companies to sign a voluntary pledge at the White House that they would bear the cost of new electricity generation to power their data centers. Two Democrats have introduced legislation to halt all construction on data centers until Congress passes AI safety legislation.
Maine lawmakers passed the bill against data centers last week, sponsored by Rep. Melanie Sachs, D-Freeport, in what was seen as a test case of whether such measures could be adopted in other places. Sachs said Mills’ decision to veto the bill was “simply wrong.”
“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,” Sachs said.
Story by Aditya Soni and Mrinmay Dey. BDN writers Michael Shepherd and Ethan Andrews contributed to this report.