Governor Gretchen Whitmer released her new plan to regulate data centers in Michigan Wednesday. The plan involves two parts: new policies and a pledge for all data center companies to sign.
The policy side covers items related to data centers’ use of utility resources. It would set minimum payments, minimum contract terms and fees for ending a utility contract early, and requirements for credit and collateral.
The pledge would cover 10 points, including following the state’s environmental policies, generating more clean energy for the grid, and benefitting surrounding communities.
“It’s simple: any data center company that wants to invest in Michigan must ensure working families do not pay a single penny for data center development or operations, protect our natural resources, and create local, good-paying jobs,” Whitmer said in a press release.
The suggestions echo plans that Democrats in the Michigan Senate and House of Representatives have each put forward, as well as provisions the Michigan Public Service Commission included in its policies for some largescale data centers.
State Representative John Fitzgerald (D-Wyoming) said residents want to know that their water, land, air, and communities will remain safe as resource-intensive data centers move in.
“That’s what the pledge does along with the policy proposals. I think hand in hand, that’s going to create a responsible environment for them to operate while responding to the needs of Michiganders,” Fitzgerald said in an interview.
Several Michigan residents have long voiced fears about how the huge energy and water needs of massive -- often termed "hyperscale" -- data centers would affect their own bills. They’ve also raised concerns about their impact on the environment.
To that end, Sierra Club Michigan legislative and policy director Tim Minotas said the pledge is too weak.
“There are all these other areas that also need to be addressed and need to be addressed by the Legislature around water, around protecting our local communities, requiring transparency and accountability,” Minotas said.
He’s part of the chorus calling for a pause on approvals for new data center projects. That movement has gotten support from both sides of the political spectrum.
“We believe we need to have a moratorium on projects until our state enacts statewide safeguards,” Minotas said. He added that Senate Democrats’ version of data center regulations seems to have more of what he’d like to see, though “it doesn’t have everything.”
A growing number of municipalities in Michigan -- including the city of Lansing this week -- have enacted moratoriums on new data centers while they draft new regulations, but a statewide pause, like one recently approved in New York, is unlikely to happen, however, as leadership in both chambers of the legislature lean toward the regulatory route.
The governor’s plan received support Thursday from tech company Oracle, which is building a data center in Saline Township. Still, some people at the capitol weren’t fully happy with the governor’s plan.
That includes state Senator Mallory McMorrow (D-Royal Oak).
“While this is an acknowledgment of the concerns so many of our residents have, pledges are not guaranteed protections. My colleagues and I introduced what would become the strongest data center regulations in the country and it’s critical we pass these bills into law,” McMorrow said in a written statement.
Lawmakers could take up the data center issue when they come back from their summer break.
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