Data centers are making headlines across the country and Michigan is no exception.
Proposed data centers in Kalkaska, Saline Township, Howell and Lansing are sparking controversy among residents, who worry about environmental impacts like water use and noise pollution. Many are concerned about energy costs, farmland being used for projects like in Saline Township, and transparency issues.
Proponents say data centers will bring economic benefits to the region and are necessary for the growing tech industry.
The Saline Township projects will be Michigan’s first hyperscale data center, but the state already has 44 data centers in operation – including five small centers in Ingham County. Some have been running for more than 20 years in the area.
So what is a data center? Why are they controversial, and are there protections in place for people? This guide aims to answer some common data center questions.
This story is part of WKAR’s week-long series diving into data centers.
What is a data center?
A data center is a facility that hosts powerful computers. Those servers process and store massive amounts of digital data. Every time someone sends an email, scrolls Facebook or streams Hulu, that information is processed and stored in a data center.
Organizations use data centers as a central location to build, run and deliver services as well as store and process the data.
Data centers are usually large, plain buildings that look like a normal warehouse on the outside. They can be loud – up to 96 decibels inside of buildings, which is louder than a lawnmower. People have reported hearing data centers from outside, which sounds like a low buzz, and can be heard miles away in some cases.
These facilities can be traced back to the 1940s when early computing systems needed a lot of space. In the 1990s, microcomputers – like a desktop computer – were introduced and began filling the old computing system rooms. Those were called servers, and the rooms were called data centers.
The introduction of cloud computing in the early 2000s allowed organizations to access resources remotely, through the internet. The demand for data centers boomed, leading to the first hyperscale data center in 2006 – like the one proposed in Saline Township.
Today’s surge in demand for data centers is fueled by emerging technologies like artificial intelligence, 5G, and edge technologies.
And we’ll need more data centers if we want to continue using and innovating technology, said Liesl Eichler Clark. She’s the director of climate action engagement at the University of Michigan’s School for Environment and Sustainability
“We as Michiganders are innovators and we're people that like to make and innovate things. We like to design things. It's just who we are,” Clark said. “That means that we're going to continue using different tools. We're going to continue moving forward with advanced manufacturing. Data centers are a component of that.”
Why are people talking about data centers?
Michigan is attractive for companies looking to build data centers. Its cold climate helps reduce cooling costs for data centers, and lawmakers approved some sales and use tax exemptions for these companies last year.
“We’re seeing a lot more interest in Michigan right now,” Clark said. “It’s certainly something a lot of people are paying attention to.”
There are 44 data centers already operating in Michigan, including five in Ingham County, according to datacenters.com. Four large data centers are planned in Howell, Ypsilanti, Saline Township and Augusta Township. A smaller one is planned for Lansing.
But these data centers, especially the hyperscale facilities, have proven to be highly controversial.
Supporters say data centers could build jobs and revenue streams across the state. Multimillion dollar investments from companies means more state and local tax revenue.
Others say the infrastructure could harm the environment and skyrocket utility bills.
“Just because it’s an economic benefit doesn’t mean it’s a benefit to the land or the community,” said Char Rfox in one Facebook thread in the Lansing community page.
Water Use
Data centers produce a lot of heat and often use water to cool down. Hyperscale data centers can use up to 5 million gallons per day, according to the Environmental and Energy Study Institute.
In Michigan, that water doesn’t just come from the Great Lakes. Data centers hook up to municipal systems that draw water from aquifers.
Energy Use
Data centers use a lot of energy. DTE Energy’s recent data center contract increases the company’s electric load by 25%.
Consumers worry this could drive up their electricity bills, but Clark, the U-M expert, said that might not be true.
“In Virginia, there's a Lawrence Berkeley National Lab report that just got a couple of weeks ago showed the data centers grouping out there actually kept downward pressure on electricity rates, which is not what everybody's saying,” Clark said. “Everybody's saying data centers are going to drive up rates. But the reason that we didn't see rates go up in Virginia is because they were able to share the cost of the grid over more customers, and those data centers were those customers.”
In Michigan, DTE said its Saline Township data center will improve electricity affordability because the center fits in the existing power grid – the utility company would be selling excess energy.
Clark said data centers aren’t different from other types of high energy use industries.
“If you think about it from a load perspective and from a water use perspective, they're not really different from other types of heavy manufacturing. They use a lot of energy,” Clark said.
Still, utilities across the nation are raising rates to meet higher energy use more broadly. PowerLines, a consumer advocacy group, reported that gas and electric companies filed for or secured more than $34 billion in rate increases in the first three quarters of 2025 — more than double the amount from the same period last year.
Transparency
But, Clark said, companies and local governments need to be transparent about what’s happening in communities – things like environmental impact, water use and energy use predictions.
“It's really important that community engagement has to be a component of this,” Clark said. “You've got to ensure that community voices are heard and the community needs are met. Those are very critical parts of citing any type of industry.”
Mid-Michigan residents echo Clark’s transparency concerns.
“We are sick of things behind close[d] doors or in disguise. We understand things cost money, advancement takes sacrifice but don't try and pull the wool over our eyes, be as transparent as possible,” said Constance Justice in a Facebook thread about the proposed Lansing data center.
Are there protections for residents?
In order for data center builders to get the tax credits passed last year, they have to connect to the municipal – city – water system. The Department of Environment, Great Lakes and Energy has oversight over these systems, so “there are eyes” and “people paying attention” to data center’s water usage, Clark said. She said that protects the resource.
Oversight from departments like EGLE and local governments ensure companies are following existing laws.
The Public Service Commission is requiring data centers and other energy-intensive industries collaborating with Consumers Energy to enter a minimum 15 year contract with steep penalties if they break it.
That’s to protect residents from paying for the data center’s heavy energy use.
Clark said the new rule also shields consumers from being left with “stranded assets” if the “AI bubble” bursts.
Though data center-specific regulations are in early stages, there are some existing protections and new ones emerging.
“It's up to the legislature and advocacy through citizens to indicate if there are legislative changes that need to happen,” Clark said.
