Michigan Senate Democrats push for stricter data center energy, worker rules

Senate Democrats on Thursday introduced legislation to curb the energy usage and environmental impacts of hyperscale data centers
Gov. Gretchen Whitmer, environmental groups have already come out in favor of the legislation
Absent from the guardrails: Anything to do with curbing noise pollution, which has become a point of concern with data centers

LANSING — As Michiganders weigh whether to go all in or keep data centers out of their communities, a group of state Senate Democrats are pushing for new legislation to curb the potential side effects hyperscale centers may have on ratepayers, the environment and workers.

The eight-bill package, much of which was introduced Thursday, will not limit data centers from being built in Michigan but instead push for the operators of the facilities to “be better stewards and do the right thing to protect our most life-critical resources,” state Sen. Rosemary Bayer, D-West Bloomfield, told reporters during a press conference at the Capitol.

“With this legislation, we are putting transparency, accountability, and community benefits at the center of Michigan’s approach to data center development,” added state Sen. Kevin Hertel, D-St. Clair Shores.

Requests for comment left with officials at Oracle and Related Digital went unreturned in time for publication.

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Both are involved in the construction of Saline Township’s new $56 billion hyperscale data center complex, “The Barn,” which is currently under construction. It’s expected to open in 2028 and would be Michigan’s first hyperscale data center.

Gov. Gretchen Whitmer, who was at The Barn’s groundbreaking earlier this month, lauded the bills in a Thursday statement and said she was “encouraged by these ongoing conversations in the legislature” regarding data centers.

“It is extremely important that we have a strong framework in place to put Michigan in the lead on data centers and keep us competitive for transformational projects that grow our economy and create thousands of good-paying jobs,” Whitmer said.

The bills, all of which were referred to the Senate Committee on Energy and Environment, seek to do some of the following:

Cap a hyperscale data center’s water usage at 2 million gallons per day; require centers to annually report water usage beginning in 2027, and create a new permitting process for facilities using more than 550,000 gallons of water a day (Senate Bill 1046).
Facilities permitted under the legislation could have their permits revoked after multiple failures to adequately report things such as wastewater volume and pollutants
Require facilities using more than 20 megawatts of electricity to enter into 20-year contracts with utility companies and power their buildings with 90% renewable energy (SB 1047).
Require the Michigan Public Service Commission to not approve any contracts, discounts or rates between an electric utility and a data center unless they hire apprentices during the building process whose programs are in good standing with the US Department of Labor (SB 1048).
Laborers used during the construction and installation processes must also be paid an area’s prevailing wage or minimum wage, whichever is greater.
Ban public officials from entering into nondisclosure agreements on the topic of data centers, with some exceptions (SB 1049).
Require data center operators to enter into a legally binding agreement between themselves and community stakeholders, including the area’s local government, which outlines how the facility will “accommodate and benefit the public health, safety and general welfare” of the area in which the data center resides (SB 1050).
Bar data centers from receiving approval or a permit to build without a community benefit agreement in place first (SB 1051).

Two additional bills in the package, SB 762 and SB 763, were introduced to that same Senate energy committee in December but have yet to receive a hearing.

The former bill requires annual MPSC reports on data center water usage and total energy consumption beginning in 2027, while the latter prohibits companies from passing on water infrastructure upgrade costs to residential customers when expanding operations.

Notably, addressing noise pollution, which has emerged as a major point of concern for residents and communities, was not part of the new legislation.

Bayer said it was “something that we are talking about and thinking about” but did not commit on Thursday to adding the policy to the package.

Nonetheless, support for the legislation from groups like the Sierra Club and the Michigan Energy Michigan Jobs Coalition — which comprises other environmental groups like the Michigan Environmental Justice Coalition and Michigan Environmental Council — was swift.

“The companies benefiting from these projects should be responsible for the costs they create, and Michigan residents deserve confidence that new development will not compromise affordability, reliability, or community needs,” Andrea Pierce, deputy director of programming for the Michigan Environmental Justice Coalition, said in a statement.