Maine governor vetoes landmark data center ban

This article was originally published by Maine Morning Star.

Maine Gov. Janet Mills on Friday vetoed a bill that would have banned data centers larger than 20 megawatts until November, 2027 — which would have been the first such moratorium in the nation. 

“A moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates,” Mills wrote in her veto letter to the Legislature. “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.”

The bill, LD 307, saw significant debate in the Maine Legislature, as lawmakers attempted to add an exemption process aimed at proposed projects in Jay and Sanford. Tony McDonald, who is involved in the Jay project, said the ban would stop the project at the former paper mill. 

In a statement Friday, bill sponsor Rep. Melanie Sachs (D-Freeport) said Mills’ veto was “simply wrong.”

Sachs said the Maine Artificial Intelligence Task Force had explicitly recommended to the governor that Maine should develop a plan for responding to data center developments.

“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,” Sachs said. “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.”

Americans for Prosperity, a libertarian political advocacy group, hailed Mills’ decision, saying she stood up for Maine’s economic future.

“At a time when states across the country are competing for investment and innovation, this veto sends a strong signal that Maine is open for business and reinforces the state’s commitment to growth and innovation,” said Ross Connolly, the group’s Northeast region director. 

Mills said earlier in the session that she wanted an exemption process, but ultimately legislators failed to pass an amendment. She emphasized her stance again in her statement Friday: “I supported the exemption and would have signed this bill if it had included it.”

The bill also would have created the Maine Data Center Coordination Council to assess policy tools for regulating data centers, but Mills said she intends to issue an executive order to establish the council. 

“I believe it necessary and important to examine and plan for the potential impacts of large-scale data centers in Maine, as the use of artificial intelligence becomes more widespread,” Mills said. “Given the serious conversations about data centers here and around the country, I believe this work should commence without delay.”

Maureen Drouin, executive director for Maine Conservation Voters, said in a statement that Mills’ veto sides with developers over safeguards for Maine’s environment and residents.

“Across the country, the development of large-scale data centers has far outpaced the ability of policy and lawmakers to properly regulate them and establish sensible protections,” Drouin said. “Maine had a chance to push pause and establish the right regulatory framework to protect its people, their wallets and the environment from polluting, resource-hungry data centers. This veto flies in the face of that responsibility and the bipartisan will of the Maine Legislature, passing the buck to the next Governor to rein in large-scale data centers after they’ve arrived.”

Seth Berry, executive director of Our Power, said the veto was the “wrong decision” for Maine, and the concerns about Jay are “a pretext and a poor excuse.”

Berry noted the strong, bipartisan support for the moratorium and said the group helped organize nearly 6,880 letters from members of the public to elected officials.

“But all is not lost,” Berry added. “We believe Maine people will now take matters into their own hands, community by community, and we are confident that they will win.”

In her veto message, Mills emphasized that the 2023 closure of the Androscoggin Mill was a “devastating” blow to the local economy and eliminated hundreds of jobs.

“As a long-time resident of Franklin County, I know well how critical the mill was to generations of working families, and how important it is — and how challenging it has been — to promote reinvestment and job-creation at the former mill which is a brownfield site,” Mills said. “After prior redevelopment efforts failed, the Town of Jay worked for two years on a $550 million data center redevelopment project to finally bring jobs and investment back to the mill site.”

Mills said that the Town of Jay, the Franklin County commissioners and the regional Chamber of Commerce all reached out to her office to voice support for the development project. 

The Jay project would inherit the paper mill’s existing agreement with Central Maine Power, which provides for 82 megawatts. McDonald said CMP estimates that the grid could provide up to 200 megawatts without needing any improvements and the agreement states that if the grid ever needed any upgrades, the data center would pay for that work.

The project is also expected to use far less water than the paper mill, and developers plan to tear down the gas-fired power generation plant that’s on site, and build a solar field to help generate power.

“This project — which is now under contract and which has received several permits — is expected to create more than 800 construction jobs, at least 100 high-paying permanent jobs, and would contribute substantial property tax revenue to the Town of Jay,” Mills said. “The project developers are committed to revitalizing the mill site by utilizing its existing industrial buildings, water, and electrical infrastructure to avoid the adverse impacts cited in the bill, including impacts to ratepayers.”

Lawmakers will return for a final day of work Wednesday, and could vote to overturn the veto. But that requires a two-thirds vote in both chambers, and earlier roll calls on the bill did not have that level of support. 

On Thursday, Mills did sign LD 713, which excludes data centers from some tax incentive programs.