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Darian Woods (2:33)

So, Dustin, we're at this meeting in Pavilion Township, Michigan, and it's full.

Dustin Dwyer (2:38)

Yeah, it's a very small building, small room. And the head of the planning commission was starting to get worried. So if any more people show up for this, we're going to have to adjourn and then re notice it for.

Planning Commission Chair (2:51)

A bigger space because we're at limit now for capacity.

Darian Woods (2:55)

And so is somebody leading the opposition here?

Dustin Dwyer (2:58)

No, there wasn't, like, a group that organized this response. This was just people from the community. And it's a small community. Only a little over 6,000 people live here. But when it comes to data centers, they are united.

Elizabeth Clark (3:11)

It's great to see community coming together.

Dustin Dwyer (3:15)

This is Elizabeth Clark, and when she gets up to talk, she asks people to raise their hands if they live within 10 miles of here. And most people do. And Clark says, for her, this is actually about water.

Darian Woods (3:26)

Right. Because data centers can use a lot of water, like hundreds of thousands to millions of gallons a day. As much as a city?

Dustin Dwyer (3:35)

Yeah, it depends on the design of the data center, but the water is mostly used for cooling the computers. And Michigan has a lot of water. We're surrounded by the Great Lakes. But folks here are concerned that the proposal does not forbid using the community's drinking water.

Elizabeth Clark (3:50)

We are not all on the same side of a lot of issues. We're all here on the same side of this one because we all know that we can't live for seven days without drinkable water.

Darian Woods (4:02)

And so Michigan isn't like a hotspot for data centers. A lot of the action we've seen in Northern Virginia, also Texas, Arizona, and Nebraska.

Dustin Dwyer (4:14)

Yeah, there are definitely clusters, places that have cheaper power, lots of land, or just lots of data centers already nearby.

NPR Announcer (4:21)

But.

Dustin Dwyer (4:21)

But there are people who've been trying to push more data centers in Michigan, including our governor, because of the investment, the tax revenues that can flood in from a massive data center. And the demand for the AI data centers is just so big right now that the proposals are showing up everywhere, including more proposals in places that weren't at the center before, places like Michigan. But the people here are not sure it's worth it. And at the meeting, this one guy, David Sotin, raised another community concern. He said it's all risk, no benefits.

David Sotin (4:52)

So for the people in this room, the community that lives here, there is no reward for this. It doesn't bring jobs. It only brings issues. It won't bring tourism. It won't bring jobs. It brings nothing.

Darian Woods (5:05)

Sounds like it's exaggerating a little bit. You know, tax revenue can bring in a lot of money. I've seen some places using that to pay for local services. And it's not true there are no jobs. There are jobs, at least initially, during the construction of the data center.

Dustin Dwyer (5:20)

Right, initially. Although it is worth mentioning, there's some research out there that these benefits don't always outweigh the downsides. Either way, the potential benefits are what's pushing data centers forward in a lot of communities. But what it seems like now in places like Pavilion Township and many other places is the size and scale and resource requirements are just really sinking in for nearby residents.

Planning Commission Chair (5:46)

It's kind of, it's an AI gold rush right now.

Dustin Dwyer (5:48)

After this meeting, I met up with John Paver, who'd been very vocal. He actually lives in the next township over and he's not against AI. He uses it and I'm not saying just for like ChatGPT to write an email. He told me he used a program called Cursor AI to code a video game for him. So this guy is in deep.

Planning Commission Chair (6:07)

Okay.

Dustin Dwyer (6:07)

Yeah. So he pointed out that one of the state's big utility companies, CMS Energy, has recently announced plans to provide power to a data center that will use 1 gigawatt of electricity, which is a lot.

Planning Commission Chair (6:21)

This facility will use as much energy as 750,000 homes. There's no city in Michigan that is that large.

Dustin Dwyer (6:32)

And I will say it's not confirmed yet where this 1 GW data center is going to be located. It's not necessarily Paphilion Township. And when I asked the utility, CMS Energy, Consumers Energy about it, they said they wouldn't disclose the location of this site or who they're even building it for. But for Paver, he's not saying no, absolutely not. No data centers. He just wants to see more from the developers, really.

Planning Commission Chair (6:58)

Y' all gotta come up with better proposals that benefit the community and not yourselves directly. Because right now it seems it is far too one sided. And you're not gonna convince anybody to give these companies tax breaks and tax incentives for them to come in and just use up the natural resources. You know, that doesn't even pass the common sense test.

Darian Woods (7:18)

And so this is becoming a more popular take all around the country and not just your neck of the woods. According to the group Data center watch, more than $64 billion in data center investment over the past year was blocked or delayed nationwide because of local opposition.

Dustin Dwyer (7:34)

Yeah, and here in Michigan, just in the past couple of months, at least three local communities have had significant pushback against data centers coming in. And it's not just that, because also utility regulators are starting to impose these new rate structures on data centers because there's this concern that the utilities will build out infrastructure to feed power to the data center and the data center could just go belly up in a couple of years. And that would Leave regular ratepayers, just their local residents, to pay for all of those utility upgrades that happened. And so they're imposing these new structures so that local residents won't get stuck with these costs.

Darian Woods (8:09)

Huh. And that is a realistic concern because there's just so many data centers being built. And as we discussed last week, there could be some inflated demand here, AKA a potential bubble. So this makes me wonder how much this pushback is going to affect new projects across the board.

Dustin Dwyer (8:32)

Right, because until now, it's all just been about speed. You get the data center up and running as fast as possible, put the servers in and go.

Darian Woods (8:40)

So the local opposition could stop individual projects. It could slow down the overall build out. But could it really kill this AI data center boom nationwide?

Dustin Dwyer (8:51)

Well, maybe not, but it could change the approach companies might take to data centers. According to Vijay Gaddupati, who's at MIT's Lincoln Laboratory, and he runs a couple.

Vijay Gaddupati (9:01)

Of startups, I don't think development will grind to a halt. There's too many economics reasons for it, at least in the near term, for it to grind to a halt.

Darian Woods (9:12)

The consulting firm McKinsey & Co. Has estimated that companies will spend $7 trillion globally over the next five years building out data centers.

Dustin Dwyer (9:21)

Yeah, and Vijay says the way data centers have been going up, there hasn't been a lot of reason for companies to really be efficient with the way they're using all those computers inside the data center.

Vijay Gaddupati (9:32)

Now that there is some pushback on construction and, you know, either it's becoming more difficult to get new builds or it's becoming more expensive, I think that math is starting to shift again, where people are like, okay, well, let's just look at the existing asset and can we get more out of it?

Darian Woods (9:48)

Okay, so one result of all this pushback, he thinks, is that the people running the data centers that already exist will start running them more efficiently.

Dustin Dwyer (9:56)

Yeah, that's his take. He sees a lot of opportunity to squeeze out a lot more computational power out of the data centers that already exist. The alternative is more of what we've seen so far. A lot of these hyperscale data centers have started bringing in their own temporary power, like natural gas generators and fuel cells.

Darian Woods (10:17)

And that probably would not go well in places like Pavilion Township either.

Dustin Dwyer (10:21)

No, it definitely, definitely would not.

Darian Woods (10:25)

This episode was produced by Julia Ritchie with engineering by Koh Takasugi Chernifen. It was fact checked by Sierra Juarez. Kate Concannon edits the show and the indicator is a production of NPR support.

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