Maine set to become first state with data center ban

Maine is poised to implement the first statewide ban on data center construction, a move that could clear the way for other states to adopt similar measures and pump the brakes on a growing industry.

Lawmakers in Maine greenlit the text of a bill this week to block data centers from being built in the state until November 2027. The measure, which is expected to get final passage in the next few days, also creates a council to suggest potential guardrails for data centers to ensure they don't lead to higher energy prices or other complications for Maine residents.

While the bill has garnered bipartisan support, it's faced fierce opposition from tech groups and businesses worried that even a short delay in construction would set the state back.

Glenn Adams, business development director for Sargent Corporation said anywhere that puts a pause on data centers, even a temporary one, will fall behind. The Maine-based building company is constructing data centers in Virginia and North Carolina.

"Things are going so fast. There's a race against other countries," he said in an interview. "If Maine says 'no,' we're saying no to all these companies, to potential developers and investors, and they can quite quickly go somewhere else."

While Maine hasn't attracted a major data center project, several smaller ones are under construction or in early planning stages. Even without major investment, data centers and their potential impacts are becoming a flashpoint in politics across the U.S. as thousands of new projects are underway as part of the AI boom.

A fear of increasing electricity prices is a particular pain point in Maine, which already has one of the highest rates in the U.S., according to the U.S. Energy Information Administration.

Seth Berry, executive director Our Power, a nonprofit focused on energy in Maine, said a pause would give time to find ways to increase energy supply in the state and prevent costs from rising further.

"If data centers are allowed to increase those costs even more, and we aren't prepared for the data center gold rush, it could really be devastating especially for our lower and working class populations," he said.

Berry said even if companies pledge to build their own power supply along with data centers, it likely wouldn't be enough to offset an increase in electricity costs.

Maine businesses challenging potential ban

But business have pushed back, saying more companies paying for the cost of electricity in the state will take the burden off of homeowners. Maine has lost much of its pulp and paper industry in the last few decades, leaving a gap data centers could fill said Maine Chamber of Commerce President and CEO Patrick Woodcock.

Woodcock also said Maine already has a "significant" permitting process to ensure new data centers don't blow up electric bills or harm the environment.

"We have a robust regulatory process, and that process can be applied to these data centers," Woodcock said. "So we certainly think that they should be reviewed, that they should go through a state permitting process. But a moratorium is the wrong approach."

Maine might become the first state to hit pause on building data centers, but it's not the only one considering a construction hiaitus. Bills to temporarily halting data center construction have been introduced in at least dozen states, according to the National Conference of State Legislatures.

That includes Virginia and Georgia, two data-center hotspots where Meta, Google, Microsoft and others are building data centers, although Georgia's legislature gaveled out before a data center ban could be taken up.

All eyes on Maine Gov. Janet Mills

Maine's bill has a few steps to go through before becoming law, notably whether Gov. Janet Mills will exercise her veto power.

Mills asked lawmakers to include an exemption for several areas of the state where data center construction could continue. However, an amendment to do so was stuck down in the House, 29 to 115.

Complicating Mills' decision is her campaign to become Maine's next senator. Mills is facing off against Graham Platner, an oyster farmer, in a high-profile Democratic primary. Platner is leading Mills in most recent polls by double digits.

Mills' office didn't immediately respond to an email seeking comment.

"Threatening a veto is not going to be a popular position," Berry said. "She really needs the support of Maine people right now for her senate campaign."