Maine Governor Vetoes Data Center Moratorium

Maine Governor Janet Mills on Friday vetoed legislation that would have created the first U.S. state-level moratorium on new large data centers. The measure, approved by the Maine legislature, sought to halt certain new approvals while the state reviewed how major facilities could affect infrastructure and costs.

The bill would have paused approvals for data centers that require more than 20 megawatts of power until October 2027 . During that period, a state-appointed council would have been tasked with evaluating potential impacts on the local electric grid, electricity bills, air, and water, according to the legislation.

Mills said she supports a temporary moratorium in principle, but explained that she rejected this bill because it did not carve out an exemption for a specific project in Jay, Maine . That proposed data center is valued at $550 million and is expected to generate more than 800 construction jobs and at least 100 permanent high-paying jobs, along with significant property tax revenue for the town.

The governor’s decision also referenced the local economic backdrop in Jay, which faced job losses after a paper mill closure in 2023 . Supporters of the project have pointed to the potential employment and tax benefits as a way to help offset that earlier disruption.

Even as she vetoed the moratorium bill, Mills said she plans to issue an executive order to establish a council to examine data center impacts. Separately, she has signed another bill that bars data centers from Maine’s business development tax incentive programs, signaling a parallel effort to limit public subsidies while the state considers how to manage growth in the sector.

The episode underscores a broader policy debate playing out across the United States as power-intensive data centers expand. Officials in multiple states are weighing how to balance economic development goals—such as construction activity, long-term jobs, and local tax bases—against concerns tied to electricity consumption and rising energy costs.

More than a dozen states are considering similar legislation to regulate data center development, driven by worries about grid strain and higher power bills. Maine’s push for a time-limited pause was widely viewed as a test case for how far state governments might go in slowing approvals while building a framework for oversight.