The artificial intelligence boom is no longer a sci-fi scenario of the future—it is unfolding now. And the impact on our communities is potentially very damaging. Creating the computer processing power for AI requires massive data centers that run around the clock and consume enormous amounts of electricity and water. Despite their large and potentially damaging environmental impact, they have often been permitted quickly, built with speed, not giving communities adequate time or opportunity to say no, or insist on a sustainable environmental approach.

For Michigan residents, this raises serious and immediate concerns. Data centers place new stress on the state’s aging electric grid, require tremendous fresh water volumes, drive up utility costs, and there are concerns that communities will be left to pay for expensive infrastructure upgrades long after the developers move on.

What we’re seeing in Michigan:

• Michigan already has 59 data centers, and growth is accelerating. While the complete number of proposed projects is difficult to track—companies often submit multiple bids across regions in the hope that one will succeed—one figure is especially telling: In October 2025 alone, DTE and Consumers Energy announced deals totaling 6.4 gigawatts of data center power. That’s equivalent to adding six or seven major cities to the grid in just two to three years. While there are ideas proposed to provide that energy—a combination of Battery Energy Storage Systems, natural gas, and clean energy—experts are still unsure where the electricity to power those centers will come from.
• A large concern among community members and water experts is around the amount of water that data centers consume, especially because the amount and source of water is often not public information. Large data centers can consume up to five million gallons per day—comparable to the daily use of a town populated by 10,000 to 50,000 people. This matters deeply in the Great Lakes where around 45% of Michigan residents rely on groundwater for drinking water, and groundwater shortages are already occurring in every Great Lakes state.
• Electricity prices are also in question. Michigan residents already pay some of the highest electricity rates in the nation while also suffering from one of the most unreliable grids. Without proper protections, we can see our rates climb an additional 8 percent by 2030, driven by new data centers.

Artificial intelligence is rapidly reshaping nearly every aspect of modern life—from transportation and health care to workplaces and homes. Data centers themselves are not new; they have existed since the 1950s and ’60s. What is new is their scale, speed, and concentration. Today’s facilities are vastly larger, more energy-intensive, and more resource-dependent than anything that came before. Many now describe AI as the fourth industrial revolution.

Michigan and the Midwest have become prime targets for data center expansion because of our cooler climate, relatively affordable land, and access to fresh water. This is not a distant issue to plan for someday—it is happening now, and decisions made in the next few years will shape our energy system, water resources, and communities for decades.

While impacts vary by location, communities across Michigan are asking similar questions: 

• How much fresh water will these facilities consume, where does that water come from, and what happens to the wastewater?
• Who pays for the grid upgrades needed to serve data centers?
• Will electricity costs rise for residents and small businesses?
• What happens to rural communities when large industrial facilities arrive with little local benefit and limited accountability?

These questions point to a broader challenge: Who bears the risks, and who receives the rewards?

We are at a pivotal moment. If the AI boom, to some extent, is inevitable, then communities deserve strong standards that minimize harm and maximize public benefit. If the demand for AI is overstated, communities should retain the power to say no. 

Key questions remain:

• Can local governments require data centers to run exclusively on clean, locally generated energy with battery storage?
• Can water use be limited and fully reported to the public?
• How do we protect ratepayers from subsidizing private development?
• What are the long-term impacts on our water and energy systems?

At Groundwork, we take these concerns seriously—and personally. We are currently meeting with policy and legal experts as well as public officials so we can learn how to best approach data centers and understand how Michigan can responsibly respond to data center development. 

We know community engagement works as public opposition recently stopped a proposed datacenter in Kalkaska. We also know these companies wield a lot of power, and through threat of legal action can strong-arm local approval, like we saw in Saline. 2026 will be a big year as Michigan has 16 sites currently being looked at for data center development. 

Groundwork intends to share what we learn, and collaborate with other community advocacy groups and state leaders as we navigate this evolving landscape. Drawing on recommendations from the Environmental Law & Policy Center and research from the University of Michigan, Groundwork Center supports the following safeguards:

• Fiscal Equity: Repeal preferential sales tax exemptions for data centers, specifically through Michigan’s proposed bipartisan legislative package, ensuring the industry pays its fair share toward public infrastructure and services now and for decades to come.
• Water Stewardship & Transparency: Set strict, enforceable limits on consumption of fresh water. Require full public transparency for both water usage and discharge, and require the developer to bear all costs associated with independent testing, continuous monitoring, and regulatory reporting.
• Grid Responsibility: Require data center developers to fund all necessary grid upgrades required to support their demand, including but not limited to Grid-Enhancing Technologies (GETs), Virtual Power Plants (VPPs), and the integration of Distributed Energy Resources (DERs), preventing cost-shifting to the public and other ratepayers.
• Full Lifecycle Accountability: Establish enforceable financial assurances, such as bonds or escrow, to guarantee that data center operators cover 100% of future decommissioning, site remediation, and electronic waste recycling costs—protecting municipalities from future liability. Further, to protect consumers from higher bills, we need to ensure data centers cannot purchase future low-cost energy, which would force consumers to rely on more expensive power sources.
• Authentic Clean Energy Commitment: Require 24/7 matching of data center demand with new, additional carbon-free energy generation and battery storage, explicitly banning fossil-based fuels—notably, natural gas—from any definition of clean energy.

To dig deeper on data centers, you can check out this comprehensive report from the University of Michigan or these reports from the Environmental Law and Policy Center: Powering Data Centers with Clean Energy | ELPC, Testimony: Consumers Energy Needs a Smarter Plan for Data Centers | ELPC, or visit our partners at MICAN, who have developed this personal course on data centers.

This is a moment that calls for clarity, fairness, and foresight. Michigan can lead—but only if we choose to put communities, water, and people first.

Nicholas Jansen is Groundwork’s Rural Clean Energy Organizer.
nicholas.jansen@groundworkcenter.org