Governor Mills Vetoes Legislation Over Missing Data Center Exemption in Jay

Maine Governor Janet Mills has vetoed a bill that would have imposed an 18-month moratorium on large-scale data center development in the state, citing the legislation’s failure to exempt a $550 million project already underway in the town of Jay. The veto, announced on April 24, 2026, halts what would have been the first statewide ban of its kind in the U.S., reflecting a tension between statewide energy concerns and local economic revitalization efforts.

Legislation and Veto Details

Legislative Document 307 (L.D. 307), titled An Act to Establish the Maine Data Center Coordination Council and Place a Temporary Limitation on Certain Data Centers, passed the Maine Legislature with bipartisan support earlier in April. The bill sought to pause new data center projects consuming more than 20 megawatts of power for 18 months, allowing the state to study the industry’s impact on electricity rates and the environment. However, Governor Mills rejected the measure, arguing that its final version did not include an exemption for the Jay project, which she described as critical to the region’s recovery.

“A moratorium is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates. 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.”

Governor Janet Mills, in her April 24 veto letter to the Maine Legislature

The Jay Project and Local Economic Impact

The proposed $550 million data center in Jay is slated for the former Androscoggin Mill site, a brownfield property that has struggled to attract investment since the mill’s closure in 2023. The project has garnered widespread support from local officials, including the Town of Jay, Franklin County Commissioners, and the regional Chamber of Commerce, all of whom have lobbied Governor Mills to exempt the development from any moratorium.

The Androscoggin Mill, once a cornerstone of Jay’s economy, employed hundreds of workers before its shutdown. At the time of closure, the mill accounted for an estimated 22% of the town’s tax base, according to the governor’s office. A 2020 boiler explosion had already weakened the facility’s operations, and the departure of Pixelle Specialty Solutions in 2023 dealt a final blow to the local economy. Governor Mills, a longtime resident of nearby Franklin County, emphasized the project’s significance in her veto letter, noting that prior redevelopment efforts had failed and that the data center represented a rare opportunity for job creation and reinvestment.

Debate Over Data Center Growth

The veto has reignited debate over the rapid expansion of data centers across the U.S., driven by surging demand for artificial intelligence and cloud computing. Critics of the industry argue that these facilities strain local power grids, drive up electricity costs, and contribute to environmental degradation. Proponents, however, highlight their potential to revitalize struggling communities and generate high-paying jobs.

In her veto letter, Governor Mills acknowledged the broader concerns about data centers but prioritized the Jay project’s local benefits. She wrote, “After prior redevelopment efforts failed, the Town of Jay worked for two years on this $550 million project to finally bring jobs and investment back to the mill site.”

State Representative Melanie Sachs, the bill’s Democratic sponsor, criticized the veto in a statement, calling it “simply wrong” and contrary to the recommendations of a state task force on artificial intelligence. Sachs and other supporters of the moratorium argue that Maine should take a cautious approach to an industry known for its high energy and water consumption, particularly as other states grapple with the consequences of unchecked data center growth.

What Comes Next

With the veto, the Jay data center project will proceed without delay, while the broader debate over data center regulation in Maine remains unresolved. The Legislature could attempt to override the governor’s veto, though such efforts typically require a two-thirds majority and face long odds. Alternatively, lawmakers may revisit the issue in future sessions, potentially crafting new legislation that balances statewide concerns with local economic needs.

For now, the Jay project stands as a test case for how Maine—and other states—will navigate the competing priorities of economic development and energy sustainability in an era of rapid technological change.