Facts over Fear: What Michigan Needs to Know About Hyperscale Data Centers

https://crcmich.substack.com/p/facts-... As Michigan communities debate whether to welcome hyperscale data centers, the Research Council’s #FactsMatter podcast sat down with Research Associate Eric Paul Dennis to unpack the facts behind the controversy. The discussion focused on Eric’s recent paper, Data Centers in Michigan: Evaluation of Policy Controversies Regarding Hyperscale Data Center Development, which separates emotion from evidence and clarifies what these massive facilities mean for local economies, utilities, and residents. What Data Centers Are — and Why They’re Suddenly Controversial Data centers have existed for decades, quietly powering email, websites, banking, and business operations. What’s changed is scale. New AI-driven hyperscale centers are far larger, consume far more electricity, and are tied to technologies that already make many people uneasy. Dennis emphasized that concerns about AI and data centers should be treated separately: blocking a data center in Michigan will not slow the global development of AI. Economic Benefits: Big Construction Impact, Modest Long-Term Jobs Hyperscale projects bring a surge of construction activity, often employing thousands of workers at premium wages. But once built, these facilities typically support only about 100 permanent jobs, far fewer than traditional manufacturing plants. Where they have the most lasting impact is in local tax revenue. In places like Saline Township, a single data center could more than double the township’s property tax revenue, even with exemptions, while occupying only about 1% of the land. Communities often negotiate additional benefits, such as recreation funding, fire services, and farmland preservation. Electricity Demand: Huge Loads, But Not Necessarily Higher Rates A hyperscale center can draw 1–1.4 gigawatts—roughly the electricity used by one million people. Despite the eye-popping number, Dennis explained that these facilities connect directly to the regional transmission grid, not the local distribution system that serves homes. Michigan currently has excess generation capacity, and adding a large, steady customer can improve system efficiency. While parts of Virginia and Ohio saw temporary rate increases tied to rapid data-center growth, Michigan’s grid operator has already adjusted its market rules, and recent capacity prices here have declined, not risen. Water Use: Highly Variable, Often Minimal Water use depends entirely on the cooling technology used. Many modern hyperscale centers, including the proposed Saline facility, use closed-loop cooling, which uses little water, like that of an office building. Older or different designs that use evaporative cooling can require millions of gallons per day, but such systems are becoming less common.