Michigan considers subsidies for power-hungry data centers

By Adam Aton | 05/15/2024 06:46 AM EDT

Climate advocates fear that the proposed tax breaks could undermine the state’s clean energy goals.

Data centers shown in Loudon County, Virginia, on Sunday, July 16, 2023.

Data centers shown in Loudon County, Virginia. Michigan lawmakers hope tax breaks will attract data centers to their state. Ted Shaffrey/AP

Less than a year after passing a clean energy standard, Michigan lawmakers are debating subsidies to some of the biggest energy users in the country: data centers.

Supporters of the tax breaks, which have advanced in both chambers, say the state’s new climate law has helped attract green-minded tech companies that want to run their data centers on renewable energy. If Michigan offers the same incentives as other states, they argue, then the state’s ample supply of clean energy and water could make it a hub for data center investment — bringing a much-needed property tax windfall for schools and local governments.

But environmental advocates and some lawmakers are raising alarms that an influx of power-hungry data centers could break Michigan’s clean energy goals.


Opponents warn that Michigan could be inviting the same dynamics that have taken hold in states like Virginia, where utilities are considering new gas plants to meet data centers’ rising energy demand, and Georgia, where the strain on the power grid has led top lawmakers to consider a moratorium on new data center subsidies.