An effort to slow large-scale data center construction in Maine is offering new insights into how regulatory uncertainty can reshape construction activity nationwide.
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Maine Gov. Janet Mills vetoed a bill April 24 that would have imposed a statewide ban on data centers larger than 20 megawatts for more than a year. Lawmakers failed to override the veto, halting what could have become the first statewide moratorium on data center construction in the U.S.
“A moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates,” Mills said in a statement following the veto. “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.”
That project — a $550 million redevelopment of a former mill site — is expected to generate more than 800 construction jobs and boost local tax revenue, according to state officials.
Industry experts say a statewide ban would have had immediate and far-reaching consequences for contractors and developers.
“This would have had a big impact for constructing teams, given that large data centers aren’t quick builds,” said Kaitlyn DeYoung, a partner at K&L Gates. “They’re multi-year projects with heavy site work, substations, utility extensions and long-lead electrical procurement.”
A pause at the state level would have disrupted the entire construction pipeline, she said, while also eliminating the ability for developers and municipalities to negotiate project-specific conditions.
“A statewide cutoff also would change how projects get shaped,” DeYoung said. “That local bargaining path goes away under a statewide moratorium, even for projects that could meet local expectations with the right conditions.”
Instead of eliminating demand, such restrictions would likely shift investment elsewhere.
“The biggest practical effect is that demand would have shifted instead of disappearing,” DeYoung said. “Developers who can’t see a clear regulatory path are going to redeploy capital.”
The proposed 20-megawatt cap would have targeted the largest and most energy-intensive facilities, particularly those tied to cloud computing and artificial intelligence.
“The 20-megawatt line captures most of the data center activity people are worried about,” said John Crossley, also a partner at K&L Gates.
While smaller facilities could still move forward under such a threshold, Crossley noted they would not replace the scale or economic impact of larger builds.
“A hard threshold also creates odd incentives,” Crossley said. “If a project needs more load in year two, the developer can’t expand in a straight line.”
He added that limiting large projects does not necessarily free up power capacity.
“And there’s a misunderstanding that comes up a lot, which is that stopping the big projects frees up power for everyone else,” Crossley said. “That’s not how the grid works. You don’t create power by stopping someone else from using it.”
Across the country, policymakers are increasingly focused on infrastructure demands tied to data centers, including grid capacity, water usage and environmental impacts. While Maine’s proposal stalled, similar discussions are gaining traction in other states.
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“Other states are watching Maine closely,” Crossley said, noting that most regulatory action so far has occurred at the local level through temporary moratoriums and zoning changes.
DeYoung added that responses will vary widely, from caps and reporting requirements to new cost-allocation rules for infrastructure upgrades.
“States are going to respond in different ways,” she said. “But here’s the thing, a local pause is something you can work around. A statewide pause changes how developers and construction firms look at the whole market.”
As demand for data centers continues to surge, power availability is emerging as the primary constraint shaping project timelines.
“Power timing is what sets the schedule now,” Crossley said.
Originally reported by Sebastian Obando, Senior Reporter in Construction Dive.
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