Snow falls March 22 over the former Androscoggin Mill in Jay. A developer has proposed a $550 million data center for the site, but he said a pending pause in such projects would kill the plan. (Rebecca Richard/Staff Writer)
The Maine Legislature on Tuesday passed a controversial measure temporarily prohibiting new data center development for more than a year, sending it to Gov. Janet Mills for final approval.
The bill, LD 307, would create a limitation on data centers with electric loads of at least 20 megawatts by preventing the state, local governments and quasi-governmental agencies from issuing permits or other approvals until November 2027. In the meantime, a new Data Center Coordination Council — also created in the bill — would get time to study the centers’ potential impact in Maine and issue policy recommendations.
The House voted 79-62 to enact Tuesday, sending it to the Senate, which voted 21-13 to approve it later that evening.
The bill’s fate now lies with Mills, who has expressed concerns that it does not include a carveout for a data center proposal in Jay. It’s not clear whether she plans to support the measure without the Jay exception.
If signed into law, it could be the first statewide ban on data center development in the country — though municipalities across the country, including Bangor, have pursued similar bans at the local level.
Prior to final enactment, the bill was modified and sent back and forth between the House and Senate several times. An earlier draft of the bill would have allocated money from the general fund to finance the council, but a Monday amendment made the Public Utilities Commission responsible for paying.
Data centers — facilities that house computers to store data and run online applications and services, including artificial intelligence — require significant amounts of power to operate. They could consume more than one-ninth of the country’s total electricity usage by 2028, according to the U.S. Department of Energy.
Opponents of the measure have contended that data centers could bring jobs and tax revenue to local communities, especially former mill towns that have struggled to rebuild industry. Some have said a statewide ban, even if temporary, would only drive developers and their money away from Maine — though the data center boom would continue elsewhere.
In debate on the House floor Tuesday, Rep. Steven Foster, R-Dexter, who voted against the bill, said it would undermine economic development in the state.
“This is all about jobs for me,” he said.
Proponents of the ban have argued that the sites could drive up electricity costs for surrounding communities and suck up massive quantities of water, which the centers use to cool equipment.
Rep. Melanie Sachs, D-Freeport, who sponsored the measure, called the bill a “thoughtful, pragmatic pause” that would allow Maine to more effectively regulate and plan new data center development without raising utility costs for surrounding communities. She pointed to projects that have cropped up elsewhere in the country, touting local benefits that did not always come to fruition.
“Promises of employment were not realized. Promises of minimal impact did not materialize — in fact, the opposite,” she said.
LOCAL ATTEMPTS TO BUILD
So far, Maine has seen relatively little data center construction compared to elsewhere in the country, but there has been an increase in proposals over the last year.
Some of those, including in Wiscasset and Lewiston, have fizzled out or been shot down — but not all. The state’s first large-scale data center is currently in development at the former Loring Air Force Base in Limestone, though it’s not yet clear when that site will open for business.
Sachs said the moratorium on permitting was crafted in a way that would still allow the Loring project to continue.
But in the weeks since lawmakers first began mulling the ban, additional proposals have emerged, including in Sanford and at a former mill in Jay.
The developers behind both those proposals say a temporary ban would effectively kill their projects. Neither immediately responded to requests for comment following the bill’s enactment.
JAY IN JEOPARDY
Last week, lawmakers voted down an amendment that would have exempted the Jay project, despite Mills voicing support for such a carveout.
Mills reiterated her position at a budget signing ceremony in Bangor on Friday. The governor reportedly said she has “mixed feelings about data centers,” but noted that many Mainers rely on the web systems they power.
“Jay needs those jobs, with appropriate guardrails for conserving water resources, electricity resources,” she said, according to the Bangor Daily News.
Spokespeople for the governor did not return messages this week asking whether she plans to sign the bill without a Jay exemption.
Tony McDonald, the developer behind the Jay proposal, said he understood the logic behind the proposed moratorium. But he argued that his 82-megawatt proposal is a very different type of project than the hyperscale developments powering AI.
“I know what they’re worried about. I get it,” he said on a phone call last month. “We’re just getting caught up in this big dragnet.”
The measure restricts permitting for new data centers, which leaves McDonald in a strange middle ground. The developer said his team has all the necessary construction permits to begin building, but he is concerned about securing other permits once construction is finished.
“I’ve got the permits to start, but I don’t have the permits to end,” McDonald said.
COORDINATION COUNCIL
The new council would be made up of 13 members: representatives from several state offices; labor, business and environmental advocates; the Wabanaki Alliance and Maine’s two largest electrical utilities. The Department of Energy Resources would be responsible for convening the body.
The council’s goals would include “protecting ratepayers, maintaining electric grid reliability, minimizing environmental impacts, and enabling responsible and appropriately sited economic development,” according to the bill.
It would be required to host at least five meetings and submit a final report, including policy recommendations and proposed legislation, by February 2027.
ANOTHER BILL TACKLES TAX EXEMPTIONS
The Legislature sent a second data center-focused bill to Mills’ desk Tuesday, one prohibiting new data centers from getting certain incentives and tax benefits designed to support business in the state.
LD 713, sponsored by Rep. Kristen Cloutier, D-Lewiston, would bar data centers that begin operations after July from being eligible for the business equipment tax exemption or the Dirigo business incentive program. Those programs reduce the amount of property and state taxes businesses need to pay.
It also requires the Department of Economic and Community Development to “study potential financial incentives that data centers may benefit from based on current state laws” and submit a report, including suggested legislation, to the taxation committee by Nov. 4.
Spokespeople for Mills did not respond to a message asking whether she plans to sign LD 713 into law.
