The data center boom without thoughtful policies could spell higher costs for Michiganders

In the rush to attract Big Tech data center investment and development in Michigan, advocates warned that without ratepayer protections and renewable energy stipulations, our communities would be left footing the bill for unnecessary and costly utility expansion. Now, that reality is coming to fruition. 

In early April, Microsoft halted new data center projects as it reassessed long-term AI demand and energy use projections. This ongoing pause confirms what Michigan LCV and energy advocates have been saying since the beginning: the future of data center and AI growth – and the energy required – is uncertain, and lawmakers must take a balanced approach that prioritizes accountability and energy affordability over corporate handouts. 

Over the past year, Michigan has been falling over itself to attract Big Tech investments with tax breaks, special deals, and utility investments to build out new fossil fuel energy generation specifically to meet the expected energy needs of data center expansion. In some cases, proposals dedicated hundreds of megawatts of new electricity generation to serve just a handful of facilities – all with no clear plan for who will pay if those facilities never fully materialize. 

We are not anti-data center. However, it must be done thoughtfully. That’s why we called for strong stipulations and ratepayer protections in legislation tied to data center development that ended up being passed by the Michigan Legislature. One of those key provisions we pushed for that didn’t make it in the final bill was a guarantee that these new data centers would be powered by renewable energy, not big, expensive fossil fuel plants. We pushed back on rushed deals and warned lawmakers that blindly subsidizing energy-intensive facilities without long-term clarity was a dangerous gamble that could increase energy costs for Michiganders. 

Now, as Big Tech starts to rethink plans for data centers in states across the country, we see why urging caution wasn’t an overreaction. 

Here in Michigan, we also see utility companies looking for ways to skirt the bill. Consumers Energy is reportedly in talks with the Michigan Public Service Commission (MPSC) to strike a deal that would shield the utility from being on the hook for stranded assets – energy infrastructure built out that may never come online. Instead of holding Big Tech accountable for the increased energy burden, utilities are looking to pass those costs onto everyday Michiganders. That means you – the ratepayer – could be forced to pay for extensive new power plants or grid upgrades that are no longer needed. 

We don’t know how much power we’ll need in the future, but we do know that the path forward is with a balanced transition to renewable energy. Despite the changing pace of AI development and uncertainty around the Trump administration’s efforts to dismantle the EPA and clean energy programs, there is strong bipartisan support in Michigan for a balanced transition to clean energy. Instead of recklessly investing in outdated fossil fuels and making massive, long-term energy decisions without safeguards, we are holding corporations accountable for their energy burden and investing in the next generation of energy generation. 

Despite new laws incentivizing data center investment in Michigan, Michigan LCV continues to advocate for energy policies that put people first. That means building out clean energy infrastructure based on actual public need, not corporate speculation. It means requiring companies that demand large energy loads to pay their fair share, and ensuring Michiganders aren’t left to foot the bill. 

And it means increasing transparency and accountability for decision-makers and making sure they know we’re here and we’re watching.