Maine Bill Proves States Are Capable of Adopting Bad Data Center Policies Without Federal Intervention
· Reason
Amid bipartisan backlash to AI from federal lawmakers, nearly a dozen states are considering legislation that would prohibit new data center construction for a period of months to years. Maine is poised to be the first state to pass such a bill.
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On Tuesday, the Maine House of Representatives passed House Bill (H.B.) 307, largely along party lines, to prohibit "approval for the development, construction or operation of a data center with a load of 20 megawatts or more" anywhere in the state until November 2027. The bill also establishes the Maine Data Center Coordination Council, and tasks it with "protecting ratepayers, maintaining electric grid reliability, minimizing environmental impacts and enabling responsible and appropriately sited economic development."
H.B. 307 is expected to pass the Senate and be signed into law by Democratic Gov. Janet Mills, The Wall Street Journal reported on Thursday.
The bill, which was introduced in January 2025 by state Rep. Melanie Sachs (D–Freeport), chair of the Energy, Utilities, and Technology Committee, was carried over from last year's legislative session. In February, Sachs told Maine Public that the impacts that data centers have on the power grid and the environment inspired lawmakers "to take a proactive approach and do it unlike any other state has so far."
But just because states have the power to suspend data center construction doesn't mean doing so is a good idea. In fact, this precautionary approach imposes costs of its own.
State Sen. Matt Harrington (R–Stanford) said the statewide moratorium could cost his district 100 long-term jobs by shuttering the construction of a 100–300 megawatt facility that had already purchased land. The bill would stall development of the data center even though it would be powered by its own natural gas plant, reducing strain on the grid.
Still, Sachs told the Maine Morning Star that the Stanford data center, "could have serious potential impacts on Maine ratepayers [and] our electric grid." Neil Chilson, head of AI policy at the Abundance Institute, tells Reason that Sachs' bill, not data centers, could actually raise electricity bills in the long run.
"Data centers are steady, long-term customers that give utilities the reliable income they need to invest in more power generation and grid upgrades, which benefits everyone," explains Chilson.
It's also worth recognizing that Sachs' panic over the environmental impacts of these facilities is overblown. As Christian Bristichgi wrote in a recent Reason cover story, "data centers consume a tiny portion of the nation's water. While they're not the prettiest buildings to look at, they mean less noise, fumes, and traffic than almost any other land use one could care to name." And as the technology improves, its environmental impacts will shrink. "In many ways this is the least efficient AI that we will ever have," says Jennifer Huddleston, senior fellow in technology policy at the Cato Institute.
Huddleston also emphasizes that data centers are critical to existing technologies that involve cloud computing, not just AI. Adam Thierer, senior fellow at the R Street Institute, warns that blanket bans on data centers will function as "an actual Internet access kill switch" by undermining online services and raising costs.
Unfortunately, the Maine bill may be a sign of things to come. Last week, Sen. Bernie Sanders (I–Vt.) introduced a bill that would impose a nationwide moratorium on AI data centers until federal lawmakers implement a highly restrictive regulatory framework. His stated motivation is to, among other things, empower "communities that would be affected by the artificial intelligence data center…to approve or reject [its] construction."
Maine has demonstrated that state lawmakers are already empowered to regulate data centers. But just because they have that power doesn't mean they should use it.
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