Data centers have dominated conversations in the last year, facing mounting concerns from residents and government officials for their energy use and environmental impacts.
Michigan is already home to about 75 data centers, which house computer servers underpinning the internet. But a recent expansion of extremely large "hyperscale" centers, which power artificial intelligence models, has prompted some townships to study and develop temporary bans on their construction.
Hear Vivian and Austin walk you through the details in the latest episode of our daily news podcast, the Up North Lowdown.
IPR talked to experts across local policy, utilities and zoning to understand where northern Michigan fits in the shifting conversation around data centers.
Some local moratoriums, but no proposals
In the northwestern Lower Peninsula, at least three townships — Green Lake, Stronach and Hayes — have passed temporary bans on data center development, according to an IPR analysis. And at least four townships have proposed or are considering similar moratoriums.
Last month, the Green Lake Township Board of Trustees issued a 1-year moratorium to give officials “adequate time to study and possibly implement changes” to local ordinances and regulations.
There are currently no public proposals from tech companies to develop a data center in the northwestern Lower Peninsula; a preliminary plan last year from a tech developer to purchase state land in Kalkaska for a data center was scuttled by local opposition.
Data centers need lots of power — and northern Michigan doesn’t have it right now
Our region of the state doesn’t have as many connections to the high voltage transmission lines that developers of large hyperscale centers often look for, according to Sarah Mills, director of the Graham Center for Empowering Communities at the University of Michigan, which studies energy policy and land use.
“[Data centers] need to be where there is fiber, for the internet — but the next big thing they’re looking for, particularly the big hyperscalers, they’re in search of power. Electricity,” she said.
Even planned high voltage transmission upgrades to the central U.S. grid — upgrades that have been in the works for years before the spike in demand from AI data centers — don’t include the area of the state north of Ludington.
However, this area does have a lot of land, relatively low property tax rates, and connection to fiber optic that could be attractive to future tech developers.
Utilities are preparing, too
Electric utilities are bound by state law to serve customers that choose to move into their service area, whether it’s a data center or some other large industrial infrastructure.
Despite no proposals from data center developers, Cherryland Electric Cooperative’s Leelanau County Director Tom Van Pelt said the utility is considering a policy that would accommodate possible developers in a way that wouldn’t impact existing ratepayers’ bills. Cherryland’s membership primarily consists of residential homes and office buildings, Van Pelt said.
“We have to make sure we have everything in place to show, ‘If you want to come in and build in our territory, these are the things that you, as a data center, that you’re going to have to cover,’” Van Pelt said.
But he’s also skeptical that tech developers would be interested in this region, because “we would have to beef everything up in order to bring in a load of that size, and that would be expensive,” Van Pelt said.
Data centers can build out their own power
Building out additional electricity capacity remains a challenge for a lot of data center developers. So some data centers turn toward on-site electricity generation, known as “behind the meter” power.
In Michigan, the controversial Oracle and Open AI data center in Saline Township is using a mix of behind the meter — in the form of batteries that can store energy for use when peak demand is low — plus existing grid connection through contracts with DTE.
The Google-backed data center in Van Buren Township is trying something different. The company has pledged to use 1.6 gigawatts of renewable energy to power the project — and pay for necessary upgrades to get there.
Still, Michigan Gov. Gretchen Whitmer has scrutinized the proposed contracts between DTE and Google for not doing enough to protect ratepayers from the increased bills that could come with building out infrastructure.
The growth of data centers in Michigan is also complicating the state’s ambitious climate goals of generating 100% clean energy by 2050. With some estimates suggesting that electricity demand in the state could double by that time, questions remain around how quickly the power grid can be upgraded and with what type of energy.
Data center moratoriums as an opportunity to plan for industry
Grassroots opposition has led many local governments to consider how to regulate data centers from a land-use perspective. But Mills with the University of Michigan said this can be an opportunity for officials to think about the future of industrial development as a whole.
“The reality is, we haven't had a lot of industrial development in Michigan in a while,” she said.
The moratoriums being imposed by local townships are giving policy makers a chance to research and draft language that will serve their communities in the future, whether big tech wants to build a data center here or not.
“Certainly some people see data center development as a threat,” Mills said. “I see it as the newest incarnation of industrial development.”
This coverage is made possible in part through a partnership between IPR and Grist, a nonprofit environmental media organization.
