New data center regulations proposed in the Michigan Senate
Michigan Senate Democrats have introduced new legislation aimed at regulating data centers across the state. The proposed bills would implement caps on water usage, mandate upfront payment for 20 years of power costs, and restrict public officials from signing non-disclosure agreements for data center projects. These measures seek to address resident concerns about the impact on utility costs and resource availability.
Michigan Senate Democrats have proposed a new package of bills to implement stricter regulations on data centers operating within the state. State Senator Rosemary Bayer (D-West Bloomfield) announced the legislation, emphasizing that it aims to ensure Michiganders benefit from data center operations rather than bearing their burdens, particularly concerning electricity and water costs and availability. The core components of the proposed regulations include capping water usage, requiring data center projects to pay for at least 20 years of power costs upfront, and limiting the ability of public officials to sign non-disclosure agreements related to these projects.
These bills build upon 2024 laws that offered tax breaks to attract hyperscale projects, which already included a provision preventing residential customers from subsidizing data center electricity costs. State Senator Kevin Hertel (D-St. Clair Shores) stated that the new legislation would apply these rules more consistently to all data centers, establishing some of the strictest requirements nationwide. Senator Erika Geiss (D-Taylor), who co-sponsored earlier bills requiring annual reports on energy and water usage and preventing water costs from being passed to residents, reiterated the need to protect essential public resources from exploitation by private industries.
Unlike an earlier bipartisan proposal, these new bills do not seek to pause permitting for new data center projects. Instead, sponsors like Senator Mallory McMorrow (D-Royal Oak) argue that properly regulated data centers, with companies like OpenAI and Oracle contributing to new power connections, could benefit the state by adding energy generation to the grid and aiding Michigan's goal of relying on clean energy by 2040.
The proposed legislation must pass both the Democratic-controlled Senate and the Republican-led House of Representatives. House Speaker Matt Hall (R-Richland Twp) expressed a general desire for further data center regulation, focusing on reduced water usage and preventing increased energy costs for residents, though he had not yet reviewed the specific bills.