Weekly Data Center Watch: Rules, Tax Breaks and Ratepayer Costs Take Focus
Ypsilanti City Council is taking more time to develop permanent data center regulations, considering noise, water, and energy use standards. Over 30 Michigan organizations are advocating for greater transparency regarding state tax incentives for data centers. The U.S. House has approved legislation that would require state utility regulators to consider standards for large data centers to pay the full incremental costs of electric infrastructure.
Data center developments are facing debates on multiple fronts, from local regulations in Michigan to federal legislation on utility costs. In Ypsilanti, the City Council has delayed a first reading of proposed permanent data center regulations, opting to spend more time refining rules concerning noise, water usage, energy consumption, and ongoing oversight. The draft ordinance aims to define data center categories, impose special land-use reviews for larger facilities, set strict noise limits, prohibit open-loop cooling, and require annual reports on operational metrics.
Separately, a coalition of over 30 Michigan environmental, clean energy, and community organizations has urged state leaders to increase transparency around data center tax incentives. In a letter, the groups disputed the Michigan Economic Development Corp.'s (MEDC) interpretation of the law, demanding public disclosure of companies receiving exemptions, their monetary value, and compliance with state requirements. They advocate for public votes by the Michigan Strategic Fund Board on each exemption.
On the national stage, the U.S. House of Representatives passed the bipartisan Ratepayer Protection Act, which mandates state utility regulators to consider implementing standards ensuring data centers with significant peak demand bear the full incremental costs of new electric infrastructure. This legislation is particularly pertinent in Michigan, where large data center projects, such as one by Related Digital in Saline Township (Washtenaw County), are anticipated to require substantial power. A public meeting and hearing are scheduled by the Michigan Department of Environment, Great Lakes, and Energy on October 21 for a proposed wastewater discharge permit related to the Saline Township data center development.