Maine Vetoes Data Center Moratorium, but Pressure Continues

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Maine Vetoes Data Center Moratorium, but Pressure Continues Maine has rejected a data center moratorium, but pressure on the industry shows no sign of easing. Maine Governor Janet Mills has vetoed legislation that would have imposed a temporary statewide moratorium on large-scale data center development. While the decision offers a short-term reprieve for the industry, it underscores growing political and community pressure on its expansion. In a letter to lawmakers on April 24, Mills said she supports a temporary pause on new projects to better understand their potential impacts on electricity costs, the environment, and local communities. However, she rejected the bill in its final form because it failed to exempt a $550 million data center project planned for the former Androscoggin Mill site in Jay, Maine. The governor pointed to the project’s economic significance, noting it is expected to generate more than 800 construction jobs and at least 100 permanent roles, while helping to revitalize a site that has struggled to attract investment since the mill’s closure in 2023. Local officials and business groups had urged the state to allow the development to proceed. Rather than enact a blanket restriction, Mills said she will issue an executive order establishing a council to study the impacts of data center growth – a key provision of the original bill – signaling that scrutiny of the sector will continue even without a formal moratorium. The decision leaves Maine without what could have been the first statewide pause on large-scale data center development, but it does little to resolve the underlying tensions between economic development priorities and concerns over energy use, infrastructure strain, and environmental impact. Midway through the debate, Maine Governor Janet Mills vetoed the state’s data center moratorium, emphasizing economic gains while addressing community concerns. (Image: Alamy) Data Center Growth Faces New Threats Maine’s decision removes an immediate regulatory barrier, but reflects a broader pattern emerging across the US, where policymakers are attempting to slow, shape, or more tightly control data center growth rather than halt it outright. Matt Landek, global division president, data centers and critical environments at JLL, told Data Center Knowledge the data center industry is experiencing significant growth alongside increasing local resistance, creating a complex landscape for developers and communities. “Municipal moratoriums, initially intended as temporary pauses for planning, are resulting in long-term operational constraints that are so prohibitive that existing facilities cannot expand to meet demand,” he said. From his perspective, these risks are driving businesses and their associated economic benefits to more accommodating jurisdictions, such as Texas and Oklahoma, which are actively courting data center development with favorable regulatory environments. “When established facilities face expansion barriers, they consider relocation rather than remaining constrained, taking jobs, tax revenue, and infrastructure investment with them,” Landek said. He added the “perception gap” between new compute farms and existing data centers that have operated in communities for decades without controversy suggests opposition may be driven more by heightened awareness than actual impact changes. “Despite regulatory headwinds, demand remains at historic highs,” he said. John McWilliams, head of data center insights at Cushman & Wakefield, told Data Center Knowledge that many of these moratoriums include language requiring the jurisdiction to conduct deep research and evaluate the impact of data center development in their area. “Common areas of focus include impacts to local water supply, electricity usage, and increased utility costs to utility ratepayers in the area,” he said. McWilliams acknowledged that the increasing regulations impacting the industry are driven by community opposition and are already delaying or blocking development in some areas of the United States. He explained that this has sent the industry into a market that can be characterized by “managed growth”, as these regulations stand to impact what can get built, how it can get built, where it can get built, and what resources it can consume once it is built. “A likely long-term scenario is that data center developers focus their land acquisition and facility development efforts in areas where these obstacles are minimized,” he said. Federal Data Center Moratorium Proposed While Maine’s decision offers short-term relief, it reflects a broader shift as scrutiny of data center growth moves beyond state and local debates to the federal stage. A proposed federal moratorium on new AI data centers is also emerging as a focal point in the debate over how to balance infrastructure growth with environmental, energy, and community concerns. The legislation, introduced by Senator Bernie Sanders and Congresswoman Alexandria Ocasio-Cortez, would pause new data center development until national safeguards are established, including protections for energy use, environmental impact, labor, and civil liberties, amid increasing scrutiny as demand for AI infrastructure continues to rise. Susan Davenport, president and CEO of Opportunity Austin, told Data Center Knowledge that policymakers are right to focus on grid reliability and resource constraints, but broad restrictions risk sidelining economic opportunity rather than addressing the underlying challenges. “It’s important not to overcorrect,” she said, noting policymakers are balancing a challenging set of competing priorities. She said the challenge is finding a path that doesn’t treat these priorities as mutually exclusive. “In some cases, pauses or moratoriums are a reaction to legitimate concerns, but they can also risk slowing innovation at a time when demand for digital infrastructure is only increasing,” Davenport said. “The more durable approach is to solve for those constraints directly.” She added that data centers are not a niche industry; they are foundational to the broader AI ecosystem and to virtually every sector that depends on data, which is nearly every industry today. “Constraining their development doesn’t eliminate demand; it shifts demand and often makes it more expensive to meet,” Davenport said. Data Center Stoppages Gain Momentum Community opposition to data center development is evolving into a broader, organized movement with measurable impact on the industry, according to Data Center Watch, which reports that $18 billion in projects have been halted and another $46 billion delayed over the past two years. While some resistance reflects localized “not in my backyard” (NIMBY) concerns, a growing share is driven by wider issues such as environmental impact, energy use, and community effects, signaling a more sustained challenge to future development. The Associated General Contractors of America 2026 Outlook Survey found that data centers and power infrastructure account for most of the project opportunities this year, while contractors have tempered expectations for the broader construction market due to ongoing economic uncertainty. Didi Caldwell, President and CEO of Global Location Strategies, told Data Center Knowledge that moratoriums do three things: Reprice geography, stretch timelines, and change how projects are structured. “Capital will flow faster to states that can deliver power with fewer political constraints,” she said, reinforcing earlier points about developers shifting to more accommodating jurisdictions. “Places with excess generation, plentiful land, and smooth permitting will receive higher investment. Constrained regions move from the front to the back burner because they cannot move as fast.” She said she expects to see more innovation in energy integration – onsite generation, advanced load management, and potentially new approaches to where compute happens geographically. “AI infrastructure is not a pure technology story,” she said. “It is an energy, community, and capital capacity story. Regions that can align those pieces will determine where AI scales and where it stalls.”