What’s the deal with data centers in Michigan?

As lawmakers return to Lansing, critical legislation that could shape the future of clean energy in Michigan awaits action. 

Senate Bill 237 and House Bill 4906 aim to extend sales and use tax breaks to data centers until 2050 (2065 for those on brownfield sites) in hopes of attracting major tech companies, but also raise serious questions about Michigan’s clean energy future, water resources, and long-term environmental goals.

So why should you care about data centers? 

For starters, these facilities demand an enormous amount of energy and water. Data centers are projected to account for 8% of the country’s total energy consumption by 2030. They can also use more than a million gallons of water per day – placing immense pressure on both local resources and utility infrastructure. 

In states like Virginia, increased energy demands from data centers have resulted in the construction of new natural gas plants and higher energy bills for residential users, which poses a serious threat to climate action goals. Without guardrails in place, Michigan could face similar issues.

On top of massive energy demands, data centers are often marketed as big job creators, but the reality is that they frequently create fewer jobs than promised. Michigan has already seen this with smaller data center projects, where the economic benefits didn’t quite live up to the hype. 

Michigan is experiencing an economic boom thanks to billions of dollars worth of historic clean energy investments from the Clean Energy and Jobs Act and Biden-Harris Clean Energy plan. Data centers threaten to compromise our progress. If these tax breaks are not accompanied with a renewable energy requirement, they risk encouraging a doubling down on fossil fuels to meet increased energy demands, while not creating enough employment opportunities for communities that could benefit from investment. 

Transparency and accountability are key

As our historic clean energy progress faces this threat, it’s not enough to encourage tech or energy utility companies to adopt sustainable practices – we must mandate renewable energy use, energy efficiency standards, and water conservation practices. This way, we can attract investment in Michigan communities while also ensuring we’re protecting Michigan’s natural resources and our investments in a sustainable clean energy future.

Renewable energy and conservation measures to ensure data centers don’t compromise our clean energy progress must be at the center of any data center legislation. It is critical that instead of cutting massive tax breaks to these data centers– owned by the richest companies in the world – Michigan requires data centers to use at least 90% clean energy, ensure energy and water efficiency, and protect Michigan ratepayers from bearing unnecessary costs. 

Data centers are part of our growing digital infrastructure, but we need to balance tech growth with sustainability and corporate tax incentives with community benefits. By requiring data centers to be powered by renewable energy and using water efficiently, we can safeguard Michigan’s environmental progress while ensuring that tech investments truly benefit our communities.

With strong data center legislation, Michigan can attract new investment and lead the way toward a clean energy future – without compromising the health of our environment or the well-being of future generations. As we continue working with lawmakers to ensure that any data center legislation includes these essential protections, we believe Michigan’s clean energy future depends on making thoughtful, forward-thinking decisions today.