Senate Democrats say Michiganders would benefit from data centers, rather than carry their burden, under new proposed regulations.
“Michiganders are rightfully worried about the impact on electricity and water cost as well as availability,” State Senator Rosemary Bayer (D-West Bloomfield) said during a press conference Thursday. “They want to make sure that they aren’t paying the bill for this massive computing for very large companies,” she said.
The bills would cap water usage, make data center projects pay up front for at least 20 years of power costs, and limit public officials’ ability to sign non-disclosure agreements for projects.
The legislation would follow up on data center laws Michigan passed in 2024. Those laws offer tax breaks to attract hyperscale projects, provided they meet certain conditions.
One of those terms is that residential customers wouldn’t “subsidize the costs incurred to provide electric services to the facility.” Despite that and other re-assurances from state utility regulators, many residents and critics of data centers remained skeptical.
State Senator Kevin Hertel (D-St. Clair Shores) said Thursday’s bills would ease those concerns by applying rules to all data centers more consistently.
“The work we are doing here now is to make sure that any data center built here in the state to this size will be beholden to these regulations and I think that the legislation we are putting forward here today will put some of the strictest requirements on data centers anywhere,” Hertel said.
Thursday’s bills add on to some other bills Senate Democrats had already introduced earlier this year. Those bills would require annual reports on energy and water usage, and prevent water costs from being passed along to residential customers either.
Senator Erika Geiss (D-Taylor) co-sponsored those bills. She said communities shouldn’t be “subsidizing” the cost.
“Our communities deserve protections that keep essential public resources affordable and reliable. Water infrastructure is a public necessity and we must ensure that Michigan is not being exploited by private industries to help their profit margins,” Geiss said.
The bills would not pause permitting for new data center projects, unlike what a bipartisan group of Michigan lawmakers proposed earlier this year.
The sponsors of the new package argue data centers could serve Michigan residents when done right. That’s especially as the state works towards its statutory goal of relying only on clean energy by 2040.
Senator Mallory McMorrow (D-Royal Oak) said having companies, like OpenAI and Oracle, pay for new power connections for their own facility can help the state and residents.
“It actually benefits all Michiganders and helps bring energy generation on to the grid that we wouldn’t otherwise have,” McMorrow said.
To pass, any bills would need to get through the Democratic-run Senate and Republican-led House of Representatives. House Speaker Matt Hall (R-Richland Twp) told reporters he also would like to see data centers further regulators.
He discussed wanting them to use less water, not raise energy costs for other residents, and have agreements that would benefit Michiganders.
“We need to be a lot more collaborative when they come into communities,” Hall said, noting he hadn’t yet seen the new proposal.
