Lansing — Michigan Senate Democrats unveiled a sweeping set of regulations for data center developments last week, saying they wanted tech companies to come to the state, but they had to take steps to protect the environment and residents.
Under the eight-bill package, the facilities’ water use would be capped at 2 million gallons per day, and the projects wouldn’t be able to raise electricity rates for other customers. Meanwhile, the operations would have to include community benefits agreements, meaning benefits would have to be negotiated for the areas where they locate.
State Sen. Mallory McMorrow, D-Royal Oak, said the policies would represent “the most robust” data center regulations in the country if they’re enacted.
People have reasonable concerns about their utility rates and the data centers’ water usage, McMorrow said.
“The answer isn’t to pretend that this technology isn’t coming,” McMorrow said. “It is not only coming. It is already here. The question in front of us is whether Michigan sets the terms or whether we let someone else set them for us.”
McMorrow’s involvement is noteworthy because she’s currently a candidate for the U.S. Senate. Likewise, Sen. Kevin Hertel, D-St. Clair Shores, widely viewed as the most vulnerable state senator this fall, also appeared at the press conference Thursday in Lansing.
There’s been political upheaval in Michigan after state regulators, in December, approved contracts between DTE Energy Co. and a subsidiary of Oracle Corp. for a massive data center development in Saline Township.
OpenAI and Oracle have said they are investing $16 billion in the data center, with a total footprint of 250 acres and an expected energy use of 1.4 gigawatts, roughly the power demand of 1 million homes.
Some opponents of the Saline Township project have noted that it moved forward despite opposition from many local residents.
Sen. Darrin Camilleri, D-Trenton, said the new bills’ requirement of a community benefits agreement would ensure that projects happened only if local leaders consented.
“The bottom line is that our neighbors’ voices need to be centered when conversations around data center projects occur,” Camilleri said.
Hertel said the new bills put transparency, accountability and community benefits at the center of Michigan’s approach to data centers.
One of the bills in the package would bar public officials from entering non-disclosure agreements related to data centers. Another would require annual reports from the Michigan Public Service Commission on water use and total energy consumption by data centers.
The bills would have to pass the Democratic-led Senate and the Republican-led House to reach Democratic Gov. Gretchen Whitmer’s desk.
House Speaker Matt Hall, when asked about the Senate Democrats’ proposal Thursday, said he would support updates to state law that included mandates for closed-loop systems and assurances that a data center’s presence in a community would not raise energy rates for other users.
“I would support making changes to the law that do that,” the Richland Township Republican said. “I’ve not seen the Democrats’ proposal, but we’ll take a look at it.”
Another prominent Republican, state Sen. Jim Runestad of White Lake Township, who’s chairman of the Michigan GOP, has called for a 365-day moratorium on all data center projects in Michigan.
“It is foolish for lawmakers to allow untested, potentially dangerous projects in our communities without proper scrutiny and thorough diligence,” Runestad said.
In December 2024, Whitmer signed into law bills that provided sales tax breaks for large data centers.
cmauger@detroitnews.com
Staff Writer Beth LeBlanc contributed.
This article originally appeared on The Detroit News: Michigan Senate Democrats propose data center restrictions
Reporting by Craig Mauger, The Detroit News / The Detroit News
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By Craig Mauger, The Detroit News | USA TODAY Network
