Frustrations with data center projects bubble over at Michigan Capitol

This story was originally published by the Michigan Advance.

As local governments across the state unveil new data center projects, Michigan residents have grown increasingly concerned on how these developments will impact their community, demanding additional protections and transparency in how they are developed, if not a full stop to the effort entirely. 

Tech companies are pouring billions into building up data centers across the country to fuel the development of artificial intelligence, and a sales and use tax break for data centers approved by the Legislature in 2024 has courted more of these facilities to come set up shop.

On Tuesday, a few hundred people from across the state gathered outside the Michigan Capitol to speak out against the proliferation of data center projects, while elected officials called for better protections for the communities targeted for development, a rollback of the tax incentives drawing them to the state, and an end to political contributions from Michigan’s regulated energy companies.

Data centers house information technology equipment including servers, storage systems, networking equipment and other hardware for storing and distributing data. However, these facilities demand large amounts of energy to keep them running and large amounts of water to cool the equipment, prompting push back from environmental organizations and residents concerned about whether their energy rates will increase or their wells will run dry. 

While residents in some communities have managed to secure at least a temporary pause on the development of some projects, efforts like ChatGPT creator Open AI and tech giant Oracle’s stargate project in Saline Township continue to move forward despite resistance from local officials and residents.

The Saline Township project was top of mind at Tuesday’s rally, as DTE Energy, one of the largest energy companies in the state, pushes for state energy regulators to move forward and approve its contracts to supply 1.4 gigawatts to the facility. 

Michigan Attorney General Dana Nessel has criticized the company for pursuing ex parte approval of its contracts with the Michigan Public Service Commission, which would allow the effort to move forward without additional parties intervening to present evidence, offer testimony and conduct legal discovery on the deal.

While DTE maintains the project will not bring higher costs to its customers, and that its decision to apply for ex parte approval is proper procedure under these circumstances, Nessel argued in her request for a contested case matter that the company fails to support its arguments that customers will not be on the hook for higher costs later on.

“In these contested cases, we have witnesses. We have experts. People are cross examined, and the public gets to know. We deserve that right, don’t we?” Nessel said, while addressing the crowd at the rally “But now here, in the biggest case in the history of the state involving these two giant billionaire tech AI companies, they don’t want us to know anything about it.They just want us to accept their word, DTE’s word, that this is not going to impact our rates.”

She held up a poster board containing sections from the contracts made available to the public, which have been heavily redacted. 

“We just want to know what the hell is going on and what that’s going to mean for the people of our state,” Nessel said. “The Michigan Public Service Commission is there to protect all of us, not just to protect these regulated monopolies, not just to protect the AI billionaires, but to protect us, all of us, people of the state of Michigan, and I don’t think that’s too much to ask for.”

The commission is slated to meet Thursday, though it’s unclear whether the regulatory body will address DTE’s contracts, as meeting agendas are not typically shared until the day prior.

Kathryn Haushalter, a Saline Township resident who lives near the proposed site for the data center, filed a motion to intervene in the lawsuit between the Saline Township Board and the owners and developers of the site, prompted by the board’s decision to vote against rezoning the land.

The board later voted to settle the case, despite intense opposition to the project from Saline Township residents.

“If an idea’s so great, AI is so great, so beneficial to our community, you don’t have to sue your way in,” Haushalter said. “You don’t have to force it.”

Rep. Jim DeSana (R-Carleton) also took the podium to discuss a package of bills he’d introduced alongside state Reps. Dylan Wegela (D-Garden City) and Erin Byrnes (D-Dearborn), to eliminate the tax breaks the legislature had approved just a year earlier. 

“The flood of these data centers came in shortly after we passed the bill giving them the sales tax breaks.” DeSana said. “Corporate welfare should end in the state of Michigan now.” 

Wegela emphasized that these concerns cut across both sides of the aisle, endorsing efforts to keep Michigan’s energy companies from donating to politicians. 

During a press conference on Wednesday, Michigan House Speaker Matt Hall (R-Richland Township) showed some interest in the legislation, noting that he had voted against the sales and use tax exemption.

“I’m open to that,” Hall told reporters. “I voted against [the incentives] because I didn’t think data centers were the industry that we should be trying to attract. I actually think a lot of data centers would locate here without the incentive. But when we gave them the sales and use tax cut, that’s incentivizing it, now they’re all coming at once and it’s overwhelming people.”

Alongside concerns about environmental harms and the lack of transparency around data center projects throughout the state, several speakers called for attendees to give their support to the Michiganders for Money Out of Politics ballot initiative, which would bar regulated monopoly companies and government contractors from making political contributions, arguing these companies are using their resources to bring about favorable political outcomes.

“The monopoly utilities in Lansing have the best representation that their money can buy, while we the people who are supposed to be represented by our state elected officials are literally and metaphorically left out in the cold,” said Sean McBrearty, the Michigan State director for Clean Water Action.

Energy companies have a vested interest in supporting these projects due to their high demand for energy, McBrearty argued, calling on residents of all political persuasions to sign their petition to have the issue placed on the 2026 ballot.

“If you want to ensure that something like this data center scheme never happens again, go see our volunteers,” he said.

Michigan Advance is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Michigan Advance maintains editorial independence. Contact Editor Jon King for questions: info@michiganadvance.com.