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An effort to slow data center construction in Maine stalled last week.
Maine Gov. Janet Mills vetoed a bill on April 24 that would have imposed a ban for more than a year on data centers larger than 20 megawatts. The state legislature failed to muster enough votes Wednesday to override the veto.
The ban would have been the first state moratorium on the construction of data centers in the US Other states have proposed similar limits to data center constructionbut unlike Maine, none of those bills have made it to a governor’s desk.
“A moratorium is appropriate given the impacts of massive data centers in other states on the environment and electricity rates,” Mills wrote in a statement after the veto. “But the final version of this bill does not allow a specific project in the City of Jay that enjoys strong local support from its host community and region.”
Mills said this particular project, a $550 million data center redevelopment, is popular with locals for bringing jobs and investment back to a former factory. State officials estimate the work will bring more than 800 construction jobs as well as a boost to property tax revenue.
Here, Construction Dive speaks with attorneys John Crossley and Kaitlyn DeYoung, partners at K&L Gates, a Pittsburgh-based law firm. Both show statewide moratoriums, the 20 megawatt limit and construction activity.
These questions and answers have been edited for brevity and clarity.
CONSTRUCTION DIVER: What would a ban like Maine’s have meant for construction in the state?
KAITLYN DEYOUNG: This would have had a huge impact for building teams, given that large data centers are not fast builds. These are multi-year projects with heavy site work, substations, public service extensions and long-term electrical contracting.
Kaitlyn DeYoung
Courtesy of K&L Gates
A statewide break would have disrupted an entire construction pipeline.
A statewide cut would also change the way projects are set up. Developers and cities often work with conditions on things like traffic routing, noise limits, backup generation, water use and who pays for network upgrades. This local negotiation path disappears under a state moratorium, even for projects that can meet local expectations under the right conditions.
The biggest practical effect is that demand would have changed rather than disappeared. Developers who cannot see a clear regulatory path will redistribute capital. And when that happens, construction work, along with investment in infrastructure, will go with it. If nearby states offer clearer rules and shorter deadlines, capital and contractors will follow suit.
Does the 20 megawatt threshold capture most data center projects? Are there opportunities for smaller builds?
JOHN CROSSLEY: The 20-megawatt line captures most of the data center activity people are concerned about, especially cloud and AI-related projects. These are the ones that plan for a steady, steady load that rises well beyond that level.
A 20 megawatt ceiling still leaves room for smaller builds, edge installations near population centers, business installations tied to a single company, smaller colocation sites that serve regional demand. But these projects tend to connect to existing distribution systems with lighter mechanical and electrical scopes. They do not replace what is being paused.
John Crossley
Courtesy of K&L Gates
A hard threshold also creates odd incentives.
If a project needs more load in the second year, the developer cannot expand in a straight line. They will either stall or divide the campus into parcels, phases or entities, which will add cost, complicate funding and create avoidable permit wrangles.
And there’s a misunderstanding that comes up a lot, which is that stopping big projects frees up power for everyone else. That’s not how the grid works. Don’t create power by preventing someone from using it.
If Maine wants to keep some of that work in-state, pairing size limits with clear siting standards would go a long way. Cities and utilities worry about standby generation emissions, sound, water supply, stormwater, traffic, tax structure and grid upgrade time. Clear answers on these topics will do more work than a bright line cut.
Could other states follow suit with limits on data center development?
CROSSLEY: Other states are watching Maine closely.
No other state has passed a statewide moratorium. Many have talked about it, many have introduced bills, but Maine is the first to clear the legislature. The push is happening across the country, even when it doesn’t take the form of a statewide shutdown.
So far, most of the action has been local communities using temporary moratoriums to hold back approvals while they study impacts or rewrite zoning. Others have added special permit-to-use conditions and development agreements focused on the infrastructure portion of the project.
At public hearings, people focus on the infrastructure package, which funds transmission and distribution improvements, diesel reserve generation and air permits, water use and wastewater capacity, traffic and road wear, noise.
DEYOUNG: States will respond in different ways.
Some will test limits or thresholds. Some will require studies and reports. Some will use rate tools or cost allocation rules to change who pays for upgrades.
But here’s the thing, a local break is something you can fix. A statewide pause changes the way developers and construction companies view the entire market. Whether other states follow Maine depends a lot on what happens next.
Developers need to treat this as a timing and risk issue. The fastest moving projects right now are those that align energy, land, procurement and local approvals into one plan.
What other data center construction trends are you seeing?
CROSSLEY: Power time is what sets the calendar now.
Almost everywhere, developers begin interconnection and acquisition work at the same time as choosing a site. You can have everything else lined up and still not be able to pour concrete because the grid can’t provide power in the timeline you need.
Grid planners are trying to react to the rapid growth in demand. The North American Electric Reliability Corporation, or NERC, has flagged worsening reliability risk over the next decade and points to new data centers as a major driver. This backdrop is why utilities, regulators and communities are thinking so much about this.
Interconnection queues and cost allocation fights are driving new deal structures. Some projects are exploring co-location with generation, microgrid or behind-the-meter models. These structures change the scope of construction and lead to new regulatory issues.
Construction risk has increased for reasons that contractors feel every day. Long-term electrical equipment drives the schedules. Commissioning and performance testing requirements continue to change. Owners and contractors are adjusting contract terms to allocate procurement, testing and delay risk differently than before.
