The Democratic governor of Maine on Friday vetoed a bill that would have made it the first US state to impose a moratorium on large new datacenters, even as local opposition to the electricity-hungry facilities grows.

The decision reflects the difficult trade-off facing political leaders, who must weigh the impact of datacenters on the environment and household energy bills against the millions of dollars in investment and tax revenue they can bring.

If signed into law, the bill would have frozen approvals until October 2027 for datacenters requiring more than 20 megawatts of power while a state-appointed council analyzed their impact on the local grid, electricity bills, air and water.

Janet Mills, in a letter to the Maine legislature, said she supports a temporary moratorium on datacenter projects – and would have signed the bill if it had included an exemption for a datacenter project under way in the town of Jay that is key to jobs and tax revenue.

“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,” Mills said in a statement.