Maine passes first US statewide data center construction ban amid AI infrastructure backlash

Maine becomes first US state to pass data centre construction ban

Legislators in Maine have passed the first statewide data centre ban in the US amid growing pushback across the country to the rapid rollout of infrastructure underpinning the build-out of AI. The bill, sponsored by Democratic state Representative Melanie Sachs, passed mostly along party lines but won support from some Republicans and will now be sent to the governor's desk for signing. Its passing comes less than a year after St Charles, Missouri, became the first city in America to pass a data centre moratorium -- which has since been copied by dozens of other US localities. States including Georgia, Oklahoma and Virginia have also put forward proposals for temporary data centre bans amid growing concerns over the energy costs of such projects and their environmental impact. Dozens of data centres with combined investments of $156bn have been blocked by local opposition in the past year, according to analysis by research firm Data Center Watch. At the national level, Bernie Sanders, the progressive senator from Vermont, and Alexandria Ocasio-Cortez, the Democratic Congress member from New York, last month introduced a bill to pause US data centre construction. Maine is home to few data centres, but investors are looking to build more. A $550mn project is planned at the site of a former paper mill in the town of Jay. The state's legislation, closely watched by activists across the US, would prohibit construction of data centres using at least 20 megawatts of power until late 2027 so that environmental and economic impacts could be properly evaluated. Governor Janet Mills, who is facing a strong primary challenge from progressive Democrat Graham Platner, did not respond to a request for comment on Tuesday. A spokesperson for the governor told local news outlet WMTW that she "agrees with lawmakers that the rapid growth of large-scale AI data centres warrants careful evaluation of impacts on public resources, the environment and Maine ratepayers, and she supports a moratorium as put forth in [the bill] to ensure those impacts are fully understood". The spokesperson added that Mills supported an exemption to the legislation for the Jay project. Maine's bill has also been watched closely by AI industry lobbyists. Nathan Leamer, a DC-based campaigner for Build American AI, which advocates for the industry's priorities, said the state was "kneecapping" its own economy by voting for the measure. "Beyond the tradesmen and skilled workers who will now look elsewhere for opportunities to build, Maine is also delaying economic opportunities that will come from increased capacity," he said. But Anirban Basu, chief economist for the Associated Builders and Contractors, a trade association for the construction industry, said the development was "unsurprising". "Maine suffers among the most elevated rates of electricity in the nation, rendering citizens more sensitive to one of the most important implications of data centre development," he said, adding that data centres "don't fit neatly with the state's conception of itself, which revolves around fishing, hunting and the great, unspoiled outdoors".

Maine to become first US state to bar major data centers

Legislators in Maine on Tuesday endorsed a moratorium on building large data centers, becoming the first US state to try and rein in rampant construction driven by the AI race. Data center construction spending in the United States has surged in recent years, with tech firms pouring tens of billions of dollars into building out infrastructure amid the race to lead in AI. The Maine law would prohibit local authorities from issuing permits for data centers with electrical capacity exceeding 20 megawatts. Legislators in Maine on Tuesday endorsed a moratorium on building large data centers, becoming the first US state to try and rein in rampant construction driven by the AI race. The bill was passed by the state house and senate and is on its way to the desk of Democratic Governor Janet Mills, according to its sponsor, Representative Melanie Sachs. It will become law if not vetoed by Mills. "This bill positions Maine to respond deliberately and responsibly to a rapidly evolving industry," said Sachs. "People and communities across the state have been asking the Legislature to take action and temporarily pause these projects, which could have significant impacts on ratepayers, our electric grid and our environment." A boom in generative artificial intelligence has sent data center demand skyrocketing, with dozens of projects springing up across the United States. The buildout comes at a cost, as the power-hungry facilities are straining local grids and driving up electricity bills. Data centers also typically have massive footprints, taking up land that could be used for housing, businesses, recreation or green space. Public sentiment is hardening, with a recent Quinnipiac University poll finding 65 percent of Americans oppose having a data center built in their community. If signed into law, the Maine bill would pause new data center construction until November of next year. It also calls for the creation of a council to assess risks and benefits of proposed data centers and provide input for planners. Currently, there are no large-scale data centers in Maine, but some projects have been disclosed in recent weeks, according to Sachs. Data center construction spending in the United States has surged in recent years, with tech firms pouring tens of billions of dollars into building out infrastructure amid the race to lead in AI. The Maine law would prohibit local authorities from issuing permits for data centers with electrical capacity exceeding 20 megawatts. Maine is among the US states that have seen home electricity bills soar in recent years, according to the US Energy Information Administration. Data center projects were rejected in two cities in the state last year by elected officials who accused developers of concealing how much electricity and water the facilities would use, local media reported. (You can now subscribe to our Economic Times WhatsApp channel)