(The Center Square) – A growing coalition of Michiganders is forming against more than a dozen proposed data centers throughout the state.
While the push for data centers is a national phenomenon, advocates for the facilities argue that Michigan’s climate and resources make it an ideal location.
Opponents have labeled themselves “Michigan’s Data Center Resistance” and argue that environmental and taxpayer concerns should lead Michigan communities to say no data centers.
This issue will come to a head on Thursday as the Michigan Public Service Commission considers approving one of the biggest projects yet.
Growing industry
Though data centers have been around since the 1950s, even before the internet age, the initiative for more has only grown in recent years with the emergence of artificial intelligence and an ever-growing need for more cloud storage.
These large industrial facilities house thousands of computer servers used to store, process and transmit digital information for services such as cloud computing, streaming and artificial intelligence. They typically require significant amounts of electricity and water to operate and cool the equipment, making their local environmental and infrastructure impacts a central point of debate.
Michigan has 59 data centers, according to the Data Center Map. Many more are either officially in the process of approval, construction, or are being considered.
Michigan’s expansion
As recently as September, Michigan-based internet company 123Net completed an expansion of one of its data centers located in Detroit. It said in a statement that the expansion will cut network costs while “creating the ultimate environment for AI, machine learning and data intensive applications.”
Yet, this 80,000-square-foot facility is minuscule compared to the data centers of Michigan’s proposed future. One of those that has faced significant backlash is set to be located in Saline Township – a small rural community in southeast Michigan.
The $7 billion, 2.2-million-square-foot data center, is an initiative of DTE Energy for OpenAI, the company behind ChatGPT, and Oracle. If built, the “Project Stargate” center would help service artificial intelligence programs via OpenAI’s Stargate.
Yet, many are calling for the Michigan Public Service Commission to not approve the project.
“Private developers and DTE Energy need to prove that everyday Michiganders won’t be forced to subsidize corporate investments in their energy bills, and projects like this won’t hinder or block our transition to the clean energy future that we’ve set together as a state,” said Nick Occhipinti, senior policy director for the Michigan League of Conservation Voters.
The commission will meet again on Thursday to consider DTE’s proposal to fast-track approval for the center, despite opponents claiming there is a lack of transparency around the proposed contracts – which include hundreds of redacted lines.
“Michigan residents are showing up, speaking out, and demanding a public process,” said the Michigan Department of Attorney General.
Other states, like Wisconsin, are facing similar issues with transparency around these data centers – which can have substantial impacts on consumers’ energy bills.
In the next 10 years, data centers are expected to increase the average American’s energy bill from 25% to 70%, according to the Jack Kemp Foundation. Another analysis from Bloomberg News found a 267% increase in energy prices in communities located near data centers.
In Michigan, controversy is also swirling around a proposed 300,000 square-foot data center in Ypsilanti Township set to break ground in 2026. This project, also located in southeast Michigan, is a collaboration of the University of Michigan and Los Alamos National Laboratory.
Gov. Gretchen Whitmer has applauded the project, saying it will bring jobs and economic development to Michigan.
“I’m grateful to these cutting-edge companies for betting on Michigan, building on our work to compete for and win big projects in next-generation industries from cars and clean energy to semiconductors and batteries,” Whitmer said following the October announcement of the multi-billion-dollar facility. “We will continue working together at the state level to win more projects so we can create even more good-paying, local jobs for Michiganders and grow our economy.”
Corporate subsidies
Taxpayer funding is another significant draw, pulling many companies to consider Michigan as homes for their data centers due to state grants and tax breaks. In the case of the Ypsilanti data center, it is set to receive a $100 million state grant.
That funding could be in jeopardy though, as state Rep. Jimmie Wilson Jr., D-Ypsilanti, proposed a bill last week to pull that grant. So far, House Bill 5362 has received widespread bipartisan support with 17 state representatives signing on as cosponsors.
It has not yet been taken up by its assigned committee in the state House of Representatives.
Many are flagging this funding, either direct or via tax breaks, as just another form of “corporate welfare.”
“Michigan’s businesses built this state with blood, sweat, and tears,” said Tom Leonard, a former member of the Michigan House and a Republican candidate for governor. “They shouldn’t be forced to fund out-of-state corporations, especially data centers. Simply put – corporate welfare doesn’t work.”
Differing opinions
Michigan Attorney General Dana Nessel said she plans to take a stand against these centers, especially the one in Saline Township.
“My office has statutory authority to intervene on behalf of ratepayers and I’m sounding the alarm about DTE’s questionable proposal for a 1.4 gigawatt data center,” Nessel said. “Michiganders shouldn’t be left wondering if our energy bills will go up to pay for this. We deserve transparency.”
Consumers Energy, Michigan’s largest energy provider, has responded to some of the efforts from Nessel and her office. It labeled her position “anti-investment.”
“When businesses grow, families have more choices – better jobs, stronger schools, and thriving communities where people want to live and stay,” said Lauren Snyder, Consumers Energy’s senior vice president and chief customer and growth officer.
While many in Michigan’s small communities are up in arms about the data centers, leading to viral social media clips from city meetings statewide, not everyone is expressing the same concern. Some see this instead as an opportunity for Michigan to be at the forefront of technology’s newest frontier.
“AI, digitization, automation, are all run on data center-based platforms,” said Brian J. Shoaf, the vice president of public policy at the Detroit Regional Chamber. “If Michigan doesn’t land data centers, those other projects … that can come with them, won’t be here.”
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