Gov. Janet Mills vetoes moratorium on data center development in Maine

Gov. Janet Mills has vetoed legislation to temporarily ban the development of large-scale data centers in Maine.

The bill passed through the state Legislature with bipartisan support earlier this month. It would have enacted an 18-month moratorium on new data centers using more than 20 megawatts of power. If enacted, the law would have been the first of its kind in the U.S.

But the governor had asked for an exception to allow a $550 million facility planned in Jay. But an amendment to the bill that exempted the Jay project was defeated in the Legislature.

“A moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates,” she wrote in her veto letter. “But the final version of this bill fails to allow for a specific project in the Town of Jay that enjoys strong local support from its host community and region.”

Data centers have proliferated across the U.S. in recent years, in response to incredible computing demands from artificial intelligence software. The developments have increasingly met backlash from communities concerned about their huge appetite for electricity, water and their environmental impact.

In a statement, bill sponsor Democrat state Rep. Melanie Sachs said the governor's decision runs counter to the advice of a state task force on artificial intelligence and is "simply wrong."

“By vetoing this bill, Governor Mills isn’t just rejecting the advice of her own task force — she is resisting the will of a majority of Maine people. 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,” she said in a statement.

Maine Conservation Voters said in a statement that the governor was “siding with AI data center developers over the bipartisan will of the Maine Legislature.“

In her veto letter, Mills wrote that the 18-month ban passed by the Legislature is "appropriate," and that she supports making sure large-scale data centers don't hurt electric customers, the power grid, and the environment.

But, Mills said the Jay development is too important for the town to be derailed by the ban.

Developers plan to build a data center at the site of a former paper mill that closed in 2023. They say it doesn't carry the same impacts as bigger data centers in other parts of the U.S.

Jay has faced serious challenges since its paper mill closed in 2023.

"This development stands to provide hundreds of jobs and millions of dollars in tax revenue, helping restore the vibrancy of our town and the surrounding region," Jay Town Manager Shiloh LaFreniere wrote to Mills in a letter last week.

Despite her veto, Mills said she will still establish a commission to draft guidelines and regulations for future data centers in Maine.

This story is a production of the New England News Collaborative. It was originally published by Maine Public.