Mackinac Island — The Facebook groups are driving some Michigan corporate executives nuts.
Gone are the days when they could set and control the narrative, at least for a while. The rampant speculation and misinformation on social media are now king and all-consuming.
This has been on full display in the past year with the online revolt over massive data centers, which arrived or were proposed at the doorsteps of Michiganians living in semi-rural areas with plenty of land to build sprawling warehouses to store and process the data that makes the digital world tick.
“There’s a lot of misinformation out there,” Consumers Energy CEO Garrick Rochow grumbled during an interview at the Detroit Regional Chamber’s annual Mackinac Policy Conference.
Before Consumers Energy, DTE Energy and big tech giants like Microsoft and Oracle could ever get their messaging straight on the economic need to compete with Ohio and Indiana for data centers or how much electricity and water they would consume, Facebook groups like “Michigan Citizens Against Data Centers,” “Say NO to Data Centers” and “Stop Washington Township Data Center” sprouted and took root with memes and mistruths.
The executives have no one to blame but themselves, and some of them appear to realize now that transparency matters.
The initial secrecy of data centers followed the same cover-of-darkness approach that the subsidiary of a Chinese-owned battery maker, Gotion Inc., used when it tried to drop a $2.4 billion plant out of the sky onto 270 acres scrubland on the outskirts of Big Rapids. The project eventually fizzled out, largely due to the public revolt that was fueled by Facebook groups and Republican politicians who capitalized on the angst of rural voters.
“I do think this notion of trust, when things are behind closed doors and there’s non-disclosure agreements in place, it makes it look like there’s something sinister going on,” said Brandon Hofmeister, senior vice president of strategy, sustainability and external affairs for Consumers Energy.
Truer words have rarely been spoken by a corporate leader in this state.
Voluminous public polling shows public trust in big institutions, whether it’s the government, a monopoly utility company or large corporations, is not good.
People are highly influenced by perception and what the algorithm feeds them.
Citizens become rightfully distrustful when the data center or battery plant developer suddenly comes to town and seals the lips of local government officials with an NDA.
It took nine months for Google to reveal itself as the tech titan behind a data center planned for Van Buren Township — and some political and business leaders are hailing the project as transparent. As public pressure mounted, Microsoft earlier this year terminated NDAs with officials in four municipalities in Kent County, where it was pursuing potential data centers. Microsoft is pursuing a data center in the Grand Rapids suburb of Gaines Township that would be served by Consumers Energy for electricity if the project comes to fruition.
“I think the tech companies have been surprised by how quickly the anti-data center movement has shown up, not only here in Michigan, but across the United States,” said Trevor Lauer, vice chairman of DTE Energy. “There’s a series of them that are regrouping and trying to get their public messages refined, but largely, people were welcoming the data centers into their communities up until about six months, nine months ago.”
“I think they were just caught a little flat-footed by how quickly everything changed,” Lauer added.
Since they’re the in-state companies, DTE and Consumers have felt more heat emanating from the data center fight than their prospective Silicon Valley customers. By the time a data center deal is buttoned up, it’s almost too late to correct the public record in today’s fractured news and information environment.
“With the narratives that people are picking up on Facebook groups, they’re not believing it,” Hofmeister said of efforts of data center supporters to educate.
The Mackinac conversation should have focused on: Where’s the transparency?
At last week’s Mackinac Policy Conference, there was a series of sessions titled WTF for “What’s The Fix?” They focused on education, economic development, data centers and artificial intelligence.
Embedded in each of the topics is a single nagging issue that business and political leaders have been pussyfooting around: Transparency.
WTF?
No, WTT.
Where’s The Transparency?
Voters have grown wary of battery plants, data centers and whatever else is billed as the next big economic development project that seems to spring out of nowhere.
Nondisclosure agreements with the Michigan Economic Development Corp., surprise land deals, nine-figure appropriations from a Legislature that won’t subject itself to the same transparency laws that it makes counties, cities and townships follow. WTT.
Extracting information from a state agency like the MEDC about how tax dollars were spent on a legislative earmark or economic development grant can take months.
“It’s crazy that people can’t see contracts in real time and vendors in real time,” said former Attorney General Mike Cox, a Republican running for governor.
Public education is mired in a host of trust issues, starting with the ever-changing mandates from the Legislature and the governor. Educators don’t trust Lansing because Lansing keeps changing the rules that they play by. WTT.
“That old Ronald Reagan line of ‘we’re from the government, we’re here to help’ … our citizens aren’t feeling that, and … it’s not a partisan issue,” said Eaton County Prosecutor Doug Lloyd, the Republican nominee for attorney general.
What is the fix for the trust crisis?
Fixing the trust crisis in government and large institutions is daunting.
One of the biggest challenges is that the government is not keeping up with the speed of the digital world.
“People are now used to consuming, getting information quicker than ever before, and government doesn’t provide information quickly,” Cox said.
Another issue that needs fixing is giving the public more information, not less — and more time to digest it.
In the case of data centers, neither DTE Energy nor Consumers Energy is building them. But they get roped into the secrecy game by the potential customer, a data center operator that could become one of their biggest customers.
They’re supplying the electricity to power them through special contracts regulated by the Michigan Public Service Commission, a highly technical state regulatory agency that is not easy for the average person to navigate for information about, say, what goes into the cost of generating and transmitting electricity.
In November, DTE asked the Public Service Commission to fast-track the approval of its electricity plan for Oracle and OpenAI’s Saline Township data center in four weeks and skip public hearings. The commission stretched out its deliberations to six weeks and gave Saline Township residents an opportunity to air their grievances, albeit in a virtual meeting.
But DTE’s bid to cut out the public hearing fed the public perception that the Public Service Commission is a rubber stamp for Michigan’s two monopoly utilities.
Never mind the fact that Oracle, OpenAI and Google will pay a premium to DTE Energy for electricity at the data centers in Saline Township and Van Buren Township. Many people also don’t realize that a Michigan law shields residential ratepayers from the cost of new electricity generation needed to meet the enormous power needs of data centers.
Consumers and DTE executives acknowledged last week that there have been missteps. They are also trying to put the public relations work back in the laps of the tech companies that are trying to build out an infrastructure for the artificial intelligence economy.
“That’s probably the most difficult piece of the transaction right now,” Lauer said. “They have to continue to bring a level of transparency and community benefits and try to explain to people what they’re doing.”
clivengood@detroitnews.com
This article originally appeared on The Detroit News: Livengood: Data center secrecy at the center of Michigan’s trust crisis
Reporting by Chad Livengood, The Detroit News / The Detroit News
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