As she faces backlash for championing data centers, Gov. Gretchen Whitmer unveiled a pledge companies can voluntarily sign promising to safeguard Michigan’s environment and residents from energy cost increases. She also called on lawmakers to bolster regulations for the facilities powering artificial intelligence.
The vast complexes warehouse servers, and they consume massive amounts of energy and water. Whitmer approved a law in 2025 offering tax breaks to technology companies that locate data centers in Michigan, fueling concerns among environmentalists. Since then, data center projects have sprung up across Michigan, prompting local pushback. Amid the controversy, Whitmer has celebrated one of the biggest AI developments – a hyperscale data center coming to Saline Township for OpenAI, the company behind ChatGPT.
Whitmer cast the AI data center protection plan she unveiled Wednesday, July 15, as a national model.
“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,” the governor said in a statement.
Her Michigan Affordability and Responsible Growth Pledge asks companies that sign on to follow current data center regulations and be good economic stewards in the communities where they locate. For instance, the pledge asks companies to affirm: “We will work to contribute to lower costs, stronger infrastructure, and greater economic stability for the communities we join.”
Whitmer is also calling on lawmakers to codify data center-related regulations from the Michigan Public Service Commission, which approves energy rate increases. The legislation Whitmer is eyeing would cover termination fees for data center energy contracts along with other items to ensure the facilities bear the cost of the demands they impose on the energy grid. Lawmakers have already introduced data center legislation, including measures requiring companies building data centers to ensure the costs of operating the facilities, from construction to powering them, don’t fall on residents.
“I’m calling on all data center companies to sign the pledge, and on the Michigan legislature to codify every single one of our guardrails in Michigan law,” Whitmer said in a statement.
Rules approved by the MPSC last November require data center developers to enter into 15-year contracts with utilities at 80% minimum demand (which requires data centers to pay for a certain baseline amount of electricity, regardless of usage), automatic five-year contract extensions that require four years’ notice to exit, administrative fees paid by developers and exit fees for data center developers who no longer seek to operate a facility.
In Lansing, lawmakers have proposed additional guardrails around data center development — as well as pumping the brakes on new projects completely.
Last month, Senate Democrats introduced legislation increasing minimum monthly billing demand requirements to 90%, capping the amount of water large data centers can use each day, mandating community benefit agreements and more. Whitmer called the legislative package encouraging.
Others in the Capitol, however, think new data center development should be paused to give policymakers time to consider guardrails. In both the Senate and House, Republican lawmakers have introduced bills to institute a one-year moratorium on new data center projects.
In criticizing Whitmer’s data center plan, Legislative & Political Director for the Sierra Club Michigan Chapter Tim Minotas backed such a pause. “Pledges and promises are not enough. Michigan needs strong, enforceable data center regulations now. Michiganders deserve real protections against unchecked data center development. That’s why we’ve been calling for a temporary moratorium on hyperscale data center approvals until the Legislature enacts enforceable safeguards that protect our natural resources, communities, and ratepayers,” Minotas said in a statement.
Meanwhile, Michael Egbert, vice president of corporate communications at Oracle, which is one of the developers of the hyperscale data center celebrated the announcement from Whitmer. “We support the Governor’s commitment to ensuring data center companies pay their own way, and are building responsibly to meet every commitment in the pledge, including not increasing utility bills or compromising grid reliability,” he said in a statement.
On Tuesday, July 14, New York became the first state to enact such a moratorium, after Gov. Kathy Hochul signed legislation enacting a one-year pause.
Proponents of data centers, however, say stopping new developments entirely, even if only for a year, puts states at risk of missing out on investment from companies that need data centers to power their programs. The consulting firm McKinsey estimated $7 trillion in data center infrastructure investment from 2025-2030. A recent report from Lansing-based Public Sector Consultants (commissioned by the Michigan Chamber Foundation) said Michigan stands to lose out on this spending (and the construction jobs it would create) if a one-year moratorium were put in place.
Utility companies seeking to power data centers, which can use significant amounts of energy, say large-scale projects can lead to additional investment in electrical infrastructure. Such projects can also lead to lower electric costs, utility officials say, in the event the companies can sell off additional energy acquired to power the facilities.
But there are vocal opponents of the facilities in Michigan.
Environmental advocates warn data centers add demand to overall energy usage and could threaten the state’s transition to clean energy. Whitmer signed legislation in 2023 setting a 2040 goal for 100% clean energy generation in Michigan. The law does allow utility companies to seek exemptions to use fossil fuels for energy generation if the companies don’t believe they’ll be able to meet demand solely relying on clean sources. Both DTE Energy and Consumers Energy, Michigan’s two largest investor-owned utilities, have said they’re confident they can meet additional power demand while hitting the state’s clean energy targets.
Water usage also sparks concern. Large data centers can use up to 5 million gallons of water each day, according to the Environmental and Energy Study Institute, with the primary use being for evaporative cooling of the air heated by constantly running equipment.
A recent report from the Citizens Research Council of Michigan argued data centers should be evaluated on an individual basis in communities. The report found that while economic benefits of the facilities are often overstated, Michigan appears to have the water and power supplies necessary to mitigate the typical concerns associated with data center growth.
Contact Clara Hendrickson at chendrickson@freepress.com or 313-296-5743.
You can reach Arpan Lobo at alobo@freepress.com.
This article originally appeared on Detroit Free Press: Whitmer calls on data centers to protect residents, resources
Reporting by Arpan Lobo and Clara Hendrickson, Detroit Free Press / Detroit Free Press
USA TODAY Network via Reuters Connect
By Arpan Lobo and Clara Hendrickson, Detroit Free Press | USA TODAY Network
