A who’s who of the nation’s most powerful politicians and tech tycoons are forcing through a proposal for a massive data center in rural Michigan as locals from across the political spectrum have come out in force against it, with one calling it “uniquely evil”.
Saline Township, Michigan, residents fear the $7bn center would jack up energy bills, pollute groundwater, and destroy the area’s rural character. The 1.4 gigawatt center would consume as much power as Detroit, and would help derail Michigan’s nation-leading transition to renewable energy.
Responding to resident pressure, Saline Township’s board of trustees in September voted down the plans, but the data center’s powerful backers – including Donald Trump, Open AI’s Sam Altman, Oracle’s Larry Ellison, Michigan governor Gretchen Whitmer, utility giant DTE Energy, and Stephen Ross, the real-estate billionaire and Trump donor who owns Related Co – fought back.
Related Digital sued, and, vastly outgunned, the township board quickly folded and reversed its decision over strong resident objections. Now the project’s backers are trying to avoid minimal regulatory scrutiny on energy costs and pollution.
The controversy over the data center is representative of the David v Goliath fights playing out across the US, pitting working- and middle-class residents against the interests of billionaires and the political establishment.
“This is part of an experience that America and the world is having around tech billionaires who are seizing power and widening the gap between those have much too much … and the working and middle classes,” said Yousef Rabhi, a former Democratic state legislative leader and clean energy advocate who opposes the plans.
“That’s what these data centers are symbolic of, and they’re the vehicle for is the furtherance of this divide,” Rabhi added.
The proposal is part of the broader “Stargate” project composed of five data centers backed by the Trump administration, which granted $500bn in federal subsidies for them. It’s the largest project in Michigan history in terms of investment, and it also received subsidies on taxes that could have gone to roads and schools, among other uses, Rabhi said.
The plan’s supporters say the center would provide essential AI infrastructure, in part for national security, and create a few hundred jobs. Huge sums of money are at stake for the tech and utility companies.
Ross’s Related Digital is the data center’s developer, while OpenAI, which produced ChatGPT, and Oracle will use the center to house its AI infrastructure.
In a statement, Related Digital alleged company the township’s decision violated zoning laws, and the spokesperson stressed the suit was filed jointly with three Saline Township property owners who are selling their property to Related.
“Thankfully, we were able to reach a settlement agreement with the township to allow this project to move forward,” the spokesperson said. They noted Related is also making about $14m in donations to local causes.
Saline Township is a small community of about 4,000 just outside Ann Arbor. The Stargate project is one of around a dozen data center proposals in Michigan over the last year that are strongly opposed at the local level. It’s one of four proposed near Ann Arbor – last week, plans for a second a few miles away in a neighboring town surfaced.
Some municipalities have been successful in derailing plans, while others have lost the fight.
In Saline Township, former US marine Kate Haushalter and her husband are raising five children in a farmhouse next to the data center site. They bought and renovated the once-dilapidated home so they could live in a bucolic area, and Haushalter said she was not about to cede ground even though the township did.
“Maybe because I was in the Marine Corps, but I would rather stay and fight,” Haushalter said. “I’m sure the chances are slim, but it’s worth fighting for, and I don’t want to teach my kids to roll over.”
‘We were dealt the cards we were dealt’
Big tech companies such as Google, Microsoft and Open AI, which often own data centers, typically have enough political support at the state and federal levels that inexperienced local leaders who are comparatively poorly resourced are left on their own to defend their town from the centers.
Saline Township supervisor Jim Marion conveyed that challenge when he told angry residents during a contentious November discussion that the township’s “hands were tied”.
“This township doesn’t have the money to fight these big companies. You got to understand that,” Marion told the crowd. “We were dealt the cards we were dealt.”
Some municipalities have utilized zoning laws to block the centers. Beyond that, there’s little local officials can do, and state and federal level regulations on the centers are virtually non-existent.
Still, residents are growing more organized. A first protest on 1 December drew about 200 people, who Rabhi described as “truly a cross-section of American society”. The next week, 800 people participated in a state-level public input session, and organizers are pressuring state environmental regulators to hold up the project’s required wetland permits.
Among residents leading the pushback is Josh LeBaron, whose home sits about 500 yards from the site, where crews have broken down.
He characterized the project as “uniquely evil” because of the environmental risks, and because, he and others allege, the companies and government have been secretive about their plans. In response to questions about accusations of nimby-ism leveled against local residents by the project’s supporters, LeBaron said he would not be opposed to other developments.
He noted that Michigan is full of former industrial sites that would be more appropriate for the 575-acre property.
“I would be at home reading a book if it were a subdivision,” LeBaron said.
A Related spokesperson told the Guardian the company “explored sites across Michigan before deciding on this site, which is ideal as it’s a contiguous flat area”, and is set close to a major road and transmission lines.
Higher bills and the end of Michigan’s climate laws
Local opponents’ best hope for holding up the project lies in the arcane utility regulatory process on the massive amount of power the data center would require.
DTE Energy claims the data center’s power demands and need for expensive new infrastructure will not increase residential electricity prices.
But it doesn’t want to show its math.
DTE filed a petition with the Michigan Public Services Commission (MPSC), the state agency that regulates utilities, asking the MPSC to fast-track the plan’s approval. DTE’s request for an “ex parte” case requires limited scrutiny of its claim that the center won’t destroy the climate laws, or increase electricity bills.
In response, Michigan attorney general Dana Nessel and consumer advocacy groups filed a legal petition with the MPSC, calling for a “contested case” that would require much closer regulatory review of DTE’s claims.
The MPSC is helmed by Whitmer appointees, and the governor has strongly backed the project, raising suspicions among opponents that the agency will approve the ex parte request.
Studies from across the country have shown data centers often increase rates, and DTE and regulators “cannot claim transparency while shutting the public out of the only process that requires DTE to support its claims with actual evidence”, said Bryan Smigielski, Michigan campaign organizer for the Sierra Club, which is intervening in the regulatory battle.
In a statement, a DTE spokesperson said: “To be clear, these data center customer contracts will NOT create a cost increase for our existing customers.”
DTE has said the project won’t derail Michigan’s transition to clean energy, but state data and DTE’s plans suggest otherwise.
Michigan, in late 2023, passed nation-leading climate laws that require utilities to transition to renewable energy by 2040. But the law included an “off-ramp” that allows utilities to continue running or building fossil fuel plants if renewable sources cannot handle the energy grid’s load.
At its peak, DTE’s grid already demands about 9.5 gigawatts of power, while the grid’s capacity is 11gw.
In July, DTE told investors it is in negotiations with big tech companies to provide 7gw of power for several proposed data centers.
The Saline center’s 1.4gw may not cause an exceedance of the 11gw threshold, especially because DTE is planning to build battery storage. But the Saline center along with any of the other proposed centers likely would trigger the off-ramp.
DTE appears to be planning for that likelihood: DTE Energy executives said the company would likely need to build new gas plants to accommodate the data centers’ demand.
Saline Township ‘will never be the same’
Haushalter’s kids were born in the renovated farmhouse and are homeschooled there.
She and her husband try to teach the kids to respect nature. The family manages beehives, watches the geese and plant trees for wood to use in their wood-burning stove. At night, they take the kids outdoors for bonfires to look at the stars. “We’re not a big screen family,” Haushlater said.
The noise, light and air pollution is already disrupting the life the family built over 13 years. The center, if it is fully built, would fully destroy it, Haushalter said.
“We are really passionate about nature and teaching our kids about it and I can’t believe the biggest construction project in Michigan is landing literally in my backyard, and there’s no recourse for the little guy,” she said. “It’s going to crush us.”
