Overview:
- The Great Lakes region is witnessing a surge in data center development, driven by the demand for artificial intelligence, but this growth brings environmental challenges. These facilities consume vast amounts of water and energy, raising concerns among residents and policymakers.
- Michigan's recent tax incentives aim to attract data centers, yet experts urge policies that enforce transparency and efficiency.
- Advocates call for regulations ensuring data centers utilize renewable energy, prioritize on-site generation, and finance infrastructure needs to prevent burdening communities.
You’ve probably heard alarming headlines: “Your AI searches are draining water supplies!” or “Data centers will make your electricity bills skyrocket!” Maybe you’ve heard the opposite: “Data centers will bring jobs and economic growth to Michigan!”
So what’s actually true?
If you’re feeling confused, you’re not alone. The data center boom is one of the fastest-moving infrastructure stories in the Great Lakes region, and it’s happening faster than most people — including many policymakers — realize.
This guide cuts through the noise.
We’ll answer the questions people are actually asking, fact-check common claims you’ve seen on social media, and help you understand both the real risks and the real opportunities that data centers bring to the Great Lakes.
Who this guide is for:
- Michigan residents hearing about data center proposals in their communities
- Anyone trying to understand what data centers mean for our water, energy, and climate
- People who want balanced information, not just hype or panic
- Advocates, policymakers, and journalists looking for accessible explanations
What you’ll learn:
- What data centers actually are and why they’re booming in the Great Lakes
- The facts about water and energy use
- What’s happening in Michigan and across the region right now
- The potential economic benefits and immediate environmental concerns
- What can be done to develop data centers responsibly in the Great Lakes
Let’s get started.
Table of Contents
- Q: Data centers 101: What exactly is a data center?
- Q: Why are we suddenly hearing so much about data centers?
- Q: Why are data centers booming in the Great Lakes?
- Q: How big are these facilities?
- Q: I saw on social media that “one email uses a bottle of water.” Is that true?
- Q: So how much water DO data centers actually use?
- Q: Why do data centers need so much water?
- Q: Is this a problem in the Great Lakes? We have abundant water, right?
- Q: How much electricity do data centers use?
- Q: Will data centers make my electricity bill go up?
- Q: Where will all this the electricity come from?
- Q: OK, but aren’t data centers supposed to bring jobs and economic growth?
- Q: What technology or policies could make a difference?
- Q: What can individuals do?
- Q: Is it too late? Are the decisions already made?
Q: Data centers 101: What exactly is a data center?
A: Think of it as a giant warehouse full of computers running 24/7.
These aren’t regular desktop computers. They’re powerful servers stacked in rows, processing and storing massive amounts of digital information.
When you:
- Stream Netflix
- Use Google search
- Store photos in the cloud
- Send emails
- Use social media
- Ask ChatGPT a question
… all of that data is processed and stored in data centers somewhere.
Data centers never sleep. They run constantly, generating heat that must be cooled, and they need massive amounts of electricity to operate. In 2023, data centers consumed 4.4% of all electricity generated in the United States, according to the Department of Energy, and that number could triple by 2028.
Q: Why are we suddenly hearing so much about data centers?
A: Two words: Artificial intelligence.
AI requires dramatically more computing power than traditional internet services. A single AI query (like asking ChatGPT to write an email) uses about 10 times the electricity of a regular Google search.
As AI explodes in popularity, with tools like ChatGPT, Claude, Google Gemini, and thousands of business applications that incorporate AI right into the tools you use every day, tech companies are racing to build the computing infrastructure to support it. McKinsey estimates $6.7 trillion in data center investment is needed worldwide by 2030.
Yet there are doubts about the size of the AI market among individuals, businesses, and the public sector. Experts caution that many planned data centers may never get built.
“An important point to understand is that a lot of this (is) speculative,” Andy Lawrence, executive director of research at Uptime Institute, which inspects and rates data centers, told The Guardian. “Many of the data centers, often announced with a fanfare, either will never be built, or will be built and populated only partially, or gradually, over a decade.”
Q: Why are data centers booming in the Great Lakes?
The Great Lakes hold 20% of the world’s surface freshwater. But this abundance is deceptive: between 40%-75% of Great Lakes residents depend on groundwater for drinking water, and groundwater shortages are already occurring in every Great Lakes state.
Michigan’s cool climate helps data centers cut cooling costs, and lawmakers recently approved tax breaks to attract them.
Illinois and Ohio rank fourth and fifth nationally for data center development, while Michigan has over 50 existing facilities.
The stakes are uniquely high for our region:
- Water: Some data centers use hundreds of thousands to millions of gallons daily. Water evaporates from those that use thermal cooling and does not return to local watersheds.
- Energy: The region’s clean energy commitments (Michigan’s is 100% by 2040) clash with utilities planning new fossil fuel plants to power data centers. Data centers that use less water-intensive cooling methods must use more energy.
- Community: Rural Great Lakes communities are being transformed as hundreds of acres become industrial data center campuses.
In October 2025 alone, Michigan utilities DTE and Consumers Energy announced deals for 6.4 gigawatts of data center power. DTE signed 1.4 gigawatts and is negotiating another 3 gigawatts, while Consumers Energy is finalizing 2 gigawatts across three facilities.
This is equivalent to adding six or seven major cities to the grid in just two to three years. Ohio has 185 data centers. Illinois has 224. This isn’t a future trend: it’s reshaping the Great Lakes right now.
The data for this map provided by https://www.datacentermap.com/
Q: How big are these facilities?
A: Pretty big. It varies widely, but here are some examples:
Small-to-medium:
- 50,000 – 100,000 square feet
- 5-20 megawatts of power
- Think: small warehouse
Hyperscale (the giants):
- 500,000+ square feet (some over 900 acres for entire campuses)
- 100-1,000 megawatts of power
- Equivalent electricity demand: a mid-sized to large city
To put that in perspective: The average American home uses about 30 kilowatt-hours per day. A single hyperscale data center can use as much power as 80,000 to 800,000 homes.
Q: I saw on social media that “one email uses a bottle of water.” Is that true?
A: It’s complicated. A lot of estimates are floating around, and the truth is likely somewhere in between them.
In 2025, Google disclosed that each query to its Gemini assistant consumes 0.26 ml of water — about five drops. That may sound negligible. But multiply it by billions of queries every day, and the impact becomes staggering. And these figures underestimate the full footprint, since they often exclude:
- Water used indirectly in electricity generation (power plants need water, too)
- Water used in semiconductor manufacturing
- The complete lifecycle of the AI technology, including training.
Estimates of water per email or AI query range wildly, from a few drops to 500 ml (a bottle of water). It depends on how you account for this indirect use, the type of cooling technology used, and the data center’s location.
Q: So how much water DO data centers actually use?
A: Data centers use a LOT of water.
A mid-sized data center uses approximately 300,000 gallons per day, equivalent to about 1,000 homes.. A hyperscale data center can use 1-5 million gallons per day – equivalent to a small city.
An evaporative cooling system uses this water consumptively, meaning it evaporates and doesn’t return to local rivers or aquifers. That’s very different from a manufacturer that uses water and returns it to the local watershed.
Q: Why do data centers need so much water?
A: In a word, heat. Computers generate tremendous heat when running, and keeping servers at the right temperature is critical.
Servers generate heat and they must be cooled, which is where water often comes in. Evaporative water is lost to the atmosphere instead of being returned to the local watershed.
Not all data centers use water cooling. The most common cooling method is air-based systems, though many of these rely on evaporative cooling — where water evaporates to chill air — which is more energy efficient but water-intensive.
Other approaches include dry air cooling (more energy intensive but minimal water use), closed-loop liquid systems (minimal water consumption), or hybrid methods. The choice depends on local climate and resources.
Q: Is this a problem in the Great Lakes? We have abundant water, right?
A: Yes and no. The Great Lakes contain 20% of the world’s surface freshwater. But only 1% of Great Lakes water is renewable each year from precipitation and inflow.
Between 40% and 75% of Great Lakes residents depend on groundwater (not the lakes directly) for drinking water.. Data centers don’t just draw from the lakes — they typically connect to municipal water systems that draw from local groundwater aquifers.
Groundwater shortages are already occurring in parts of every Great Lakes state, according to The Joyce Foundation. Multiple large data centers in a single area can strain local aquifers. Once groundwater evaporates, it’s not returned to that local system. And we don’t have good tracking of how much water data centers actually use.
The concern isn’t that the Great Lakes will run dry, but that local communities, especially rural ones, could face lower water tables, depleted wells, competition for municipal water supplies, and reduced stream flows that affect ecosystems like wetlands.
Q: How much electricity do data centers use?
A: Data centers are electricity-consuming monsters.
Current U.S. data centers use 4%-5% of total U.S. electricity (2023-2024), and that’s projected to reach 12% by 2030. In some regions, data centers are already the fastest-growing electricity demand.
For scale:
- A mid-sized data center: 10-50 megawatts (powers 8,000-40,000 homes)
- A hyperscale facility: 100-1,000 megawatts (powers 80,000-800,000 homes)
DTE Energy’s recent data center deal includes 1.4 gigawatts, increasing DTE’s total demand by 25%. That’s enough to power a large city. In one utility’s territory, data centers could add the equivalent of several major cities to the grid in just two to three years. And DTE has another 6-7 gigawatts in its pipeline.
Q: Will data centers make my electricity bill go up?
A: In Michigan, there’s some legal protection against that. The devil is in the details.
In April 2025, Michigan passed landmark legislation (Public Acts 181 and 207 of 2024) offering data centers sales and use tax exemptions worth millions. In exchange, the law explicitly prohibits data centers from receiving “a rate that causes residential customers to subsidize infrastructure and costs required to service the facility.”
This puts Michigan ahead of most states in protecting ratepayers. But the devil is in the details, and those are being hammered out right now at the Michigan Public Service Commission.
DTE says that data centers create “substantial affordability benefits” and that it won’t have to pass on costs to ratepayers.
The utility argues that data centers spread infrastructure costs across more customers, using “excess capacity” efficiently. But ratepayer advocates fear that billions in new infrastructure investments could become stranded assets if data centers don’t materialize or later downsize, leaving regular customers holding the bag.
Current cost allocation methods could also leave other customers paying for a portion of the expensive new generation needed for data centers. Douglas Jester, a consultant with 5 Lakes Energy, said a single 1 GW data center could increase residential rates 5%-10% if protections aren’t added.
Two cases now before the MPSC will reveal a lot about how those decisions will be made, and whether costs will be passed on to consumers.
- The MPSC issued a final order on Nov. 6 in Case U-21859 determining the rate structure for Consumers Energy data center customers. The order establishes 15-year contracts for large data centers and steep exit fees to protect ratepayers from “stranded assets” if data centers fail to materialize or downsize. This case began as an uncontested one, but intervenors successfully lobbied the MPSC to open it to public comment.
- DTE Energy asked the Commission to approve its electric contracts for a Saline Township data center by the end of the year as an uncontested case in Case U-21990. Michigan Attorney General Dana Nessel called on the MPSC to open this case up to intervenors, saying the outcome of the proceeding could impact residents’ utility bills and the state’s renewable and clean energy standards.
Q: Where will all this the electricity come from?
A: This is where the climate question comes in.
Data centers need 24/7 reliable power. U.S. electricity demand is projected to increase 50% by 2050, according to a National Electrical Manufacturers Association study, driven largely by data centers. The scale of renewable energy needed to meet this demand while phasing out fossil fuels is unprecedented.
Michigan’s law includes what environmental groups call an “off-ramp” that would keep gas or coal plants running if renewable sources cannot handle the load from the grid. Opponents warn the demand surge from data centers will likely trigger that exception.
Both DTE Energy and Consumers Energy have said they could build new natural gas power plants to meet data center demand.
Michigan’s 2023 Clean Energy and Jobs Act counts natural gas plants equipped with carbon capture and storage technology as “clean energy” under the 100% clean standard. This means utilities can build new gas plants and still technically comply with Michigan’s climate law, as long as those plants have carbon capture technology.
In Virginia, data centers’ energy demands have led Dominion Energy to keep coal generation online, and the utility looks to build a new 1 GW gas plant.
While Michigan utilities plan gas plants, the tech giants powering data centers are making unprecedented investments in nuclear energy. In the last 30 years, only three U.S. nuclear reactors have been built. But recently:
- Microsoft signed a deal to reopen Pennsylvania’s Three Mile Island nuclear plant specifically to power its data centers, the first time a nuclear plant has been brought back online for this purpose.
- Michigan’s Palisades nuclear facility, originally slated for closure, is being restarted to help meet growing electricity demand driven partly by data centers.
- Google Cloud AI partnered with Westinghouse to develop 10 new nuclear reactors called the AP100, with construction beginning in 2030.
- Meta signed a 1.1-gigawatt nuclear energy purchase agreement with Constellation Energy’s Clinton Clean Energy Center in Illinois, keeping a reactor that was originally intended to close in 2017 active through 2047.
- Amazon has invested $500 million in nuclear. The major tech companies — Amazon, Google, Meta, and Nvidia — are calling for a tripling of nuclear energy by 2050.
The industry is also betting on next-generation “shipping container size” Small Modular Reactors (SMRs) that can be factory-built and trucked to sites, with over 25 SMR applications expected to hit federal regulators before 2030.
Q: OK, but aren’t data centers supposed to bring jobs and economic growth?
A: Yes, but it’s complicated.
Proponents tout data centers as economic engines for post-industrial communities. But Michigan’s ambitions face a cautionary tale: Switch Inc.’s pyramid-shaped data center near Grand Rapids. In 2015, the Nevada company pledged 1,000 jobs and $5 billion in investment. By 2022, it had created just 26 jobs, yet continued to receive $1 million annually in tax breaks after Michigan loosened its job definitions.
Despite this failure, Michigan passed new incentives in 2024 that could cost the state $90 million by 2065, requiring only 30 jobs at 150% of local median wage for eligibility. In reality, most data centers employ between 10 and 100 people, with construction offering the bulk of temporary employment. One expert pegs the national average cost per subsidized data center job at $2 million.
Supporters highlight potential property tax revenue. Loudoun County, Virginia collects over half its property taxes from data centers, and a proposed Michigan project could generate $21 million annually. Yet many communities find the tradeoffs steep: water use, power strain, and lost opportunity for other industries. Some, like Michigan City, Indiana, have rejected projects altogether for lack of public benefit.
Critics warn that wealthy tech firms hardly need tax breaks, and the real economic return may be minimal. As one analyst noted, filling the grid with data centers could limit future growth elsewhere.
Q: What technology or policies could make a difference?
A: According to experts and policymakers analyzing the data center boom, key interventions could protect communities and resources:
1. Mandate transparency. Currently, 12 states fail to disclose aggregate revenue losses from data center subsidies, and water usage often disappears into “public supply” categories. States could require large data centers to report water and energy consumption.
Examples:
- Connecticut’s Senate Bill 1292 would require energy and water efficiency performance standards for AI data centers. The bill directs the state’s commissioner of Energy and Environmental Protection to adopt regulations establishing energy and water efficiency standards among other items.
2. Require water and energy efficiency. Technology like Equinix exists to dramatically reduce water consumption, from closed-loop systems to dry cooling that uses air instead of evaporation. States could mandate best available cooling technology, set maximum water use per megawatt, and ban wasteful evaporative cooling in water-scarce areas.
Examples:
- In Texas, advocates are pushing for requirements including rainwater harvesting, water reuse, dry cooling systems, and stricter stormwater controls for data centers in water-stressed regions like Central Texas, where a large AI data center is planned for the Edwards Aquifer region despite ongoing drought conditions.
- Industry experts increasingly recommend co-locating data centers with wastewater treatment plants to utilize treated effluent for cooling systems. Examples include Chicago’s Illinois Quantum & Microelectronics Park, which is designed to operate in a closed-loop system using wastewater treatment technologies; and proposals for Queens, New York near the Bowery Bay Wastewater Treatment Plant, which has an output capacity of 150 million gallons per day that could supply data center cooling needs.
3. Require clean energy. Michigan’s 100% clean energy mandate by 2040 risks being undermined if utilities build new gas plants for data centers. Policymakers could require data centers to use additional renewable energy — not reallocate existing clean power — and prioritize on-site generation over grid dependency.
Examples:
- Virginia’s proposed HB 116/SB 192 would tie sales and use tax exemptions to energy efficiency standards and require data centers to source at least 90% of energy from carbon-free renewable sources by 2027.
- In Lansing, the proposed Deep Green data center would donate waste heat to the municipal heating system, offsetting 25% of downtown heating fuel with a projected power usage effectiveness of 1.03-1.17, dramatically better than the industry average of 1.8.
4. Make data centers pay their way. Michigan regulators are grappling with how to prevent residential customers from subsidizing data center infrastructure, although the state’s tax exemption law theoretically prevents it. Solutions can include long-term contracts with guaranteed capacity payments, exit fees if facilities close early, and requirements that data centers fund their own grid upgrades. Without these protections, homeowners bear the risk while tech giants reap rewards.
Examples:
- Michigan enacted legislation in 2025 prohibiting residential customers from subsidizing data center infrastructure costs and lower energy rates. Data centers must pay for their own grid upgrades.
- In Virginia, legislators have introduced HB 2101/SB 960 directing the State Corporation Commission to investigate whether non-data center customers are subsidizing data center energy costs. Another bill, SB 664, would prohibit costs associated with electrical infrastructure required by data centers from being allocated to all ratepayers.
- Consumers Energy in Michigan has proposed contracts with long-term commitments and exit fees to protect against stranded costs if data centers close early or use less power than expected.
5. Plan regionally, not piecemeal. Individual projects may pass local review, but cumulative impacts across watersheds are rarely assessed. The Great Lakes could work to coordinate planning across state boundaries to set sustainable limits based on actual water availability.
Examples:
- Wisconsin created a regional water use district in the Central Sands in 2021 to manage cumulative impacts across watersheds in response to groundwater depletion, providing a working model for coordinated resource management.
- Under the Great Lakes Compact, which governs Great Lakes water diversions, the Great Lakes Regional Water Use Database tracks water consumption across multiple states, though it cannot isolate data center usage from the “public supply” category.
6. Empower communities. Michigan City, Indiana’s mayor rejected an $800 million data center for lacking meaningful job commitments and community benefits. Communities who reject data centers may face lawsuits, but can negotiate community benefits in settlement. Binding agreements with local hiring requirements, environmental limits, and real community oversight ensure development serves residents, not just shareholders.
Examples:
- In July 2025, Michigan City, Indiana Mayor Angie Nelson Deuitch rejected an $800 million data center for lacking meaningful job commitments, community benefits, and substantial tax impact. The mayor required binding commitments that would ensure lasting benefits for residents, and when the developer couldn’t provide them, she walked away.
- Virginia’s proposed SB 1449 would allow localities to require site assessments of impacts on noise and on water sources, agricultural resources, parks, historic sites, and forestland before approving high-energy facilities.
- In Maryland, local concerns about backup generator emissions have led to advocacy for comprehensive monitoring and auditing, though generators are not currently tracked by the state.
- In September, Washtenaw County passed a resolution to help local governments assess data centers’ water, energy, noise, and environmental impacts, while urging them to require 100% renewable power.
Q: What can individuals do?
A You can exercise your civic rights.
Local data center proposals often move quickly through planning processes. When data center proposals surface, officials need to hear specific questions from constituents.
You can contact your state representatives and local officials, voice your thoughts and ask them questions.
Check your local planning commission agenda. Under Michigan law, you have the right to attend and speak at planning commission meetings. The Michigan Open Meetings Act guarantees public access and participation.
Here’s what to ask:
About your electric bill:
- How will this project affect residential electricity rates?
- Will residential customers subsidize infrastructure costs for the data center?
- What protections exist to prevent cost-shifting to households?
About water use:
- What are the projected daily water usage rates?
- Will this draw from municipal water or directly from groundwater?
- How will this affect water rates and availability for residents?
About jobs and benefits:
- What are the binding job commitments, and what are the penalties for not meeting them?
- How many permanent jobs will this create, versus temporary construction jobs?
- What community benefit agreements are being negotiated?
About infrastructure costs:
- Who pays for transmission line upgrades, water main expansions, and road improvements?
- What tax incentives are being offered, and what’s the net fiscal impact?
You have legal tools to get information. Use them:
File FOIA requests: Michigan’s Freedom of Information Act gives you access to public records. Request:
- Water usage projections from public water utilities
- Environmental impact assessments
- Utility contracts and agreements
- Tax incentive packages
- Correspondence between officials and developers
How to file: Every Michigan municipality has a FOIA coordinator. Visit Michigan’s FOIA guide or your local government website. Sample language: “I request copies of all documents related to [project name], including water usage projections, environmental studies, and economic impact analyses.”
You don’t have to do this alone. Several organizations are actively studying and working on data center issues:
Alliance for the Great Lakes
- Focus: Great Lakes water protection and policy advocacy
- Email: alliance@greatlakes.org
- Website: greatlakes.org
- Role: Produced a comprehensive research report on the environmental impact of data centers in the Great Lakes.
Joyce Foundation
- Focus: Great Lakes philanthropy
- Website: https://www.joycefdn.org
- Action: Research and education on data centers in the Great Lakes states
Michigan Environmental Council
- Focus: State environmental policy and advocacy
- Address: 602 West Ionia Street, Lansing, MI 48933
- Website: environmentalcouncil.org
- Role: MEC’s chief policy officer has been vocal about ensuring data center development is approached thoughtfully, with environmental safeguards and ratepayer protections.
Michigan Environmental Justice Coalition
- Focus: Environmental justice and equity issues
- Website: michiganej.org
- Resources: Published research on data center impacts and community tools
Sierra Club Michigan Chapter
- Focus: Climate and energy advocacy
- Website: sierraclub.org/michigan
- Action: Follow their MPSC advocacy work on utility cases
Natural Resources Defense Council (NRDC)
- Focus: Midwest regional advocacy on data center policies
- Website: nrdc.org
- Action: Focus on renewable energy requirements and community equity
Michigan League of Conservation Voters
- Focus: Leading nonpartisan political voice for Michigan’s land, air, and water
- Website: michiganlcv.org
- Email: info@michiganlcv.org
- Action: Activates voters to elect and hold accountable officials who fight for environmental protection, advocates for Ratepayer Bill of Rights
Vote Solar
- Focus: State-level solar policy advocacy and clean energy access
- Headquarters: 2443 Fillmore St. #380-1375, San Francisco, CA 94115
- Website: votesolar.org
- Email: info@votesolar.org
- Action: Works in 25 states on regulatory and legislative advocacy for equitable clean energy
Citizens Utility Board of Michigan
- Focus: Consumer advocacy for utility ratepayers, fights unfair rate increases
- Website: cubofmichigan.org
- Phone: 248-385-3167
- Action: Provides expert testimony in MPSC cases, publishes annual Utility Performance Report ranking Michigan utilities
Local watershed councils provide expertise on local water issues and often coordinate with regional organizations. Find yours:
Major Michigan Watershed Councils
- Huron River Watershed Council
- Clinton River Watershed Council
- Friends of the Rouge
- Friends of the Detroit River
- Tip of the Mitt Watershed Council
- Grand Traverse Bay Watershed Center
- River Raisin Watershed Council
- Kalamazoo River Watershed Council
- And many more covering Michigan’s 86 major watersheds
Watershed councils have unique expertise in coordinating across municipal boundaries and building capacity for water protection.
Official public comment periods matter:
Michigan Public Service Commission: When utilities propose tariffs or plans for data centers, submit comments:
- Email: mpscedockets@michigan.gov
- Reference the case number (e.g., Case No. U-21867)
- Online comment form
Planning commissions: Most allow written comments even if you can’t attend in person. Comments become part of the public record.
State agencies: Michigan Department of Environment, Great Lakes, and Energy (EGLE) handles water withdrawal permits and environmental reviews.
Q: Is it too late? Are the decisions already made?
A: No, but the window is closing fast.
The momentum is undeniable. In October, Michigan’s two largest utilities, DTE and Consumers, have around 16 GW-worth of data centers in their development pipelines that could fundamentally reshape the state’s energy landscape:
For perspective, Consumers Energy’s entire system peaked at 7.5 gigawatts on its highest demand day in 2022. Data centers alone could nearly match that.
The tax incentive framework is law. Land purchases are underway.
But while data centers are coming, the how is still up for grabs.
It’s still unclear how these facilities will operate. Water efficiency standards, cooling technologies, and environmental performance requirements are not yet defined. The current tax incentive law only “encourages” sustainable practices without enforcing them, though state regulators and local governments still control permits and compliance.
Who pays for infrastructure is another issue. The debate centers on whether residents will subsidize grid upgrades or if operators will cover the costs. The MPSC approved proposed long-term contracts with exit fees as part of Consumers Energy’s tariff case while DTE seeks approval for a massive 1.4-gigawatt deal. The MPSC is still reviewing the project for which DTE would supply power, and the Michigan Attorney General is looking to open the case to allow for input from the public and advocacy groups.
Energy sources also remain in question. Data centers could either speed Michigan’s clean energy shift or prolong fossil fuel use beyond 2040. DTE and Consumers plan to build new natural gas plants, and Consumers’ 2026 Integrated Resource Plan will outline its mix of batteries and gas. Environmental groups plan to push for renewable energy requirements in data center contracts.
Location decisions carry major implications for rural areas, farmland, and local infrastructure. While the tax incentive law sunsets in 2029, communities still control zoning and permitting.
Finally, Michigan must decide how far to go. DTE may add another 3 gigawatts of capacity, and there’s no cap on total projects. The 2029 sunset offers a chance to reassess whether data center incentives deliver on promises or need to be scaled back.
What to watch:
- The MPSC is reviewing rate structures in Consumers’ Case U-21859 and DTE is seeking approval for its Saline Township data center in Case U-21990.
- Next year brings the Integrated Resource Plan filings that will chart Michigan’s energy future. Consumers and DTE are scheduled to file long-term power plans with the MPSC in 2026.
- Local governments still control permits and zoning despite state tax incentives. Several municipalities are now reviewing data center site plans, water withdrawal requests, and zoning changes for large energy projects. Each decision offers a chance for local input — like Saline Township, which secured $14 million in community investments before approving the Stargate facility.
- The tax incentive law expires at the end of 2029 unless the Legislature votes to extend it. Between now and then, advocates can document the actual track record of Michigan’s first wave of data centers: Did they create the promised jobs? Did they raise residential electricity rates? How much water did they consume?

