Mackinac Island — A new statewide poll commissioned by the Detroit Regional Chamber found 55% of likely Michigan voters said they would not want a data center constructed within 25 miles of their home.
A 25-mile radius gives a whole new meaning to the phrase not-in-my-backyard.
They don’t want ‘em in the next county, much less on the outskirts of Howell, Romeo, Saline and other far-flung exurbs targeted for large-scale data center warehouses.
The poll of 600 likely voters just underscores the vexing challenge that political and business leaders face in trying to sell the public on the need for and economic value of data centers.
The pro-data-center Detroit Regional Chamber is using its Mackinac Policy Conference this week to proselytize for data centers and introduce policy ideas that might get the public moving in their direction.
In addition to executives for utility and construction companies that stand to benefit handsomely from these colossal warehouses storing energy-intensive computers, the Detroit Regional Chamber’s conference programming on data centers will feature former Gov. Jennifer Granholm to help convert some of the masses.
Granholm, who spent four years as President Joe Biden’s energy secretary, said in an interview that Michigan needs “responsible data centers with guardrails” and more sources of clean energy to electrify AI’s ginormous computing power needs.
“I’m excited about the potential for data centers helping to drive that clean energy economy, as well as some of the man bites dog stories on data centers that, if they’re done right, can actually help to freeze or reduce bills of ratepayers. But it’s got to be done right,” Granholm told The Detroit News before the annual gathering of 1,500 business, political, education and philanthropic leaders that began Tuesday on Mackinac Island.
The last time Granholm spoke at the Mackinac Policy Conference, Michigan was just starting to emerge from the Great Recession that hit this state harder than any other in the union.
In 2010, Michigan’s automakers had just survived a near-death experience and Granholm was on her way out the door, an eight-year tenure in office that is largely remembered for the unfastening of Michigan’s 20th-century economic machine.
The Democratic former two-term governor returns to the annual Grand Hotel confab on Wednesday at a new moment of great economic uncertainty.
This time, instead of manufacturing being in a free fall, the state’s white-collar sectors look as vulnerable as ever as the rapid rise of artificial intelligence and automation renders more and more desk jobs as obsolete as the Pontiac brand that General Motors discarded when Granholm was still governor.
Being pro-data centers is not exactly a popular message in Michigan, given the citizen revolts that have sprung up in some communities against the construction of massive warehouses in farm fields to house AI’s economic takeover.
What ‘risk-adverse’ Michigan voters want for data centers
After 55% of voters flatly rejected data centers, the pollsters at the Glengariff Group asked what if there were a number of regulations in place on water, new baseload electricity generation and the use of renewable energy to keep the tech giants in check.
The chamber-sponsored poll reveals a plurality of just under 49% of likely voters would be open to a data center within 25 miles of their home if they are regulated. About 41% still said no, while 10% were unsure or refused to answer the question, according to the poll, which had a margin of error of plus-minus 4 percentage points.
It’s not a slam dunk by any means, but it suggests some voters can be persuaded. Michigan voters are “risk-averse” on data centers but want assurances that they won’t be left holding the proverbial bag, the Glengariff Group’s Richard Czuba said.
Granholm, who is now a clean energy consultant for firms that work for utilities, developers and unnamed technology companies, sees a path forward on data centers that she contended would get more public acceptance.
She pointed to Google’s $2.1 billion data center project on 282 acres east of Haggerty Road and north of the I-94 North Service Drive in Van Buren Township.
The internet search giant has pledged to pay for the generation of new electricity, as well as a premium on renewable energy, Granholm said, calling it “an example of how to do it right.”
Google is also sponsoring the panel on which Granholm is speaking Wednesday afternoon at the Mackinac Policy Conference.
Google has also agreed to invest $10 million in an energy impact fund to pay for energy-efficiency improvements to the homes of residents in Van Buren Township, Granholm said.
“They’ve been totally transparent — they haven’t come in under the cover of darkness, which is one of the best practices these data centers must be using to avoid the understandable concerns of the community (about) data center providers that are otherwise trying to be secret,” Granholm said.
Well, sort of.
It took several months before Google revealed itself as the likely end user of a data center that would need a gargantuan 2.7 gigawatts of electricity, enough juice to power all of the residential homes and apartment units in Livingston, Oakland, Macomb, Wayne and Washtenaw counties combined.
How the Van Buren project compares with other data center proposals
Township officials had their lips sealed by a non-disclosure agreement for “Project Cannoli” nearly nine months before The Detroit News unearthed the NDAs through a public records request.
Shortly after that, Google came out from behind the data center curtain. But by the time that happened, Van Buren Township’s planning commission had already approved a preliminary site plan for a sprawling warehouse of computers that will consume between 2 million and 3.6 million gallons of water per day. Township officials contended they have more than enough capacity for a township that uses about 2 million gallons of water, effectively wiping out fixed costs.
“It’s going to reduce our water prices,” Van Buren Township Supervisor Kevin McNamara said at the May 19 meeting, where the board gave Google’s data center the green light.
The Detroit chamber’s poll showed a whopping 86% of likely voters said it’s important that local governments not be allowed to dole out tax breaks for data centers or sign non-disclosure agreements that keep the projects a secret.
The Van Buren Township board blew right past that stop sign, awarding Google a 50% property tax break last week that will save the company, which reported a record $62.6 billion in profit in the first quarter of this year, $124 million over 12 years.
The developers of the Van Buren Township project certainly took a much softer approach than the big stick wielded by Related Digital, the New York-based real estate development working for Oracle and OpenAI in Saline Township.
Before Oracle and OpenAI were publicly announced, Related Digital sued the township after its board denied a zoning request, forcing the board to backtrack when it was staring down the barrel of a protracted and insolvency-inducing legal battle.
David was no match for Goliath in the farm fields southwest of Ann Arbor.
“They tried, I think, but it just wasn’t done in an open way, and I think that created all sorts of problems for hyperscalers,” Granholm said of Related Digital.
As evidenced by the proliferation of new Facebook groups trafficking misinformation on data centers, the Saline Township debacle became the rallying cry in other communities against them, muddying an already messy issue.
What Michigan voters want in data center regulation
Granholm acknowledged that people have a right to be concerned about water use, and she said the state needs guardrails to “ensure that the water use is replenished.”
Czuba said his polling in recent months suggested Michigan voters are deeply worried about the use of water to cool data centers and are suspicious that their electricity rates will skyrocket.
Michigan, the world capital for freshwater, lacks a law requiring data centers to use closed-loop water-cooling systems that circulate and reuse water to prevent evaporation.
The Detroit chamber’s poll found nearly 81% of likely voters consider this type of water recycling important.
Czuba called this a “no-brainer” policy in a state surrounded by the Great Lakes, which hold 20% of the world’s freshwater.
“They want things written into the law with teeth, and they want to make sure that tech companies and data center operators are held responsible to those teeth in the law,” Czuba said.
Michigan also should require data center companies to pay for new baseload power generation and upgrades to the electric grid so those costs don’t fall on existing residents and businesses, Granholm said.
And there should be more efforts made to land data centers on brownfield sites (think Flint’s Buick City, Lansing’s one-time GM Fisher Body Plant, Trenton’s McLouth Steel site) instead of plowing under more farm fields, the former governor said.
“Greenfield sites are just easier to develop, and the (real estate) developers of data centers may not be the hyperscaler,” Granholm said.
The Detroit chamber’s poll also shows a whopping 87% of voters said it’s important that “no costs for electricity used by a data center could be passed down to other residential or business customers.”
Because the construction of natural gas-burning power plants faces delays past 2030, Granholm argued the fastest way to scale the building and operation of data centers is through more renewable energy sources — namely wind and solar — and battery storage, a technology that’s rapidly changing for large-scale industrial use and in-home systems to squirrel away power when it’s not being used.
Data centers could tap into existing assets to get the electricity they need if they agreed to pay to install battery storage systems in homes with rooftop solar or to pay for in-home energy-efficiency projects to effectively wring more electricity out of the grid, Granholm said.
The Detroit chamber’s pollster tested this idea. About 74% of likely voters said it’s important to have that kind of community benefit accompany a data center project.
The former energy secretary sees a future where data centers can help manage the grid more effectively, which generally runs at 50% capacity but is intentionally overbuilt for a scorcher in July and the polar vortex in January.
“If you get to that worst-case scenario and the grid is completely full on the hottest day or coldest day (of the year), then the hyperscaler agreeing to dial back or shift some of its workload to another place enables the data center to be a grid asset and to ensure reliability,” Granholm said. “It essentially becomes a virtual power plant for the grid, which really makes the grid stronger.”
“And a lot of people just don’t know that,” she added.
Michigan voters have a fear of the unknown, pollster says
They don’t know it because the public messaging about data centers from political leaders to tech titans like Google, Microsoft, Amazon, ChatGPT maker OpenAI and Elon Musk’s xAI has been, by any objective measure, bad to horrendous.
Czuba said the recent polling underscores how badly the tech giants have fumbled the rollout of the data center surge, as people ask Siri while driving on Interstate 75 what time the Tigers game is tonight and then later stream the game on their phones — technological advancements made possible by data centers.
“Frankly, I think the tech companies share a lot of the responsibility here for just getting the conversation wrong, for not understanding that people are worried, apprehensive,” Czuba said.
Last week’s news that Grand Rapids insurance and fintech company Acrisure is axing 2,250 jobs and cited advancements in AI as the primary reason should give the state’s utilities, economic developers and policymakers some insight into why the texting public is jittery about data centers as the next economic panacea.
The Van Buren Township project is attracting $2.1 billion in investment, but will produce 51 permanent jobs to maintain what amounts to a giant computer server farm that will inevitably help displace workers elsewhere in the economy.
It’s not just a NIMBY thing.
Residents are worried about the water table, their electric bill and, most important, their jobs.
“This idea of, ‘Oh, they’re just opposed to data centers.’ No, they’re not. They’re risk-averse,” Czuba said. “And nobody is dealing with their concerns about their exposure to the risks.”
clivengood@detroitnews.com
This article originally appeared on The Detroit News: Livengood: Granholm back to proselytize about ‘guardrails’ for data centers
Reporting by Chad Livengood, The Detroit News / The Detroit News
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