University of Michigan expert urges Cass County to plan for data centers amid uncertainties on rates and water use

Dr. Sarah Mills, associate professor of practice in urban and regional planning and director of the Center for Empowering Communities at the University of Michigan, told a Cass County audience that local governments can and should prepare now for potential data-center development while major uncertainties about electricity rates and local water use remain.

"We don't really know what will happen to rates," Mills said, adding that Michigan's utilities and the Michigan Public Service Commission must evaluate whether new large loads require system expansions that could raise costs for existing customers. She noted the state consumes roughly 32,000 megawatts of power and that hyperscale facilities can draw a large share of incremental demand.

The presentation — billed as educational with no proposals or votes — covered how data centers vary from small server rooms to hyperscale campuses, what developers seek in sites (transmission substations, backbone fiber, contiguous cleared land and favorable zoning) and the trade-offs in cooling technology. Mills said evaporative cooling systems can use millions of gallons per day in some cases, while closed-loop cooling reduces local water use but increases electricity demand.

Why it matters: data centers are capital-intensive projects that can bring construction jobs and large property-tax bases but pose planning and environmental questions for rural and suburban communities. Mills used Saline Township and a Southfield example to illustrate differences in scale; she noted that Michigan's 2015 sales-and-use-tax exemption for data centers and a newer 2025 enterprise incentive have changed developer calculations by offering different levels of certainty about long-term tax treatment.

Local planning recommendations offered by Mills included reviewing and, if needed, expanding or clarifying industrial zoning; adopting measurable quality-of-life standards (sound limits, night-lighting rules, screening); requiring decommissioning plans with financial surety (bonds or surety policies); and getting operational commitments (backup-generator use, water consumption, testing schedules) in writing or enforceable agreements. "Put it in writing," Mills said, urging that developers' verbal promises be formalized.

On taxation and community benefits, Mills described how data-center investments are taxed as commercial personal property under State Tax Commission guidance and that personal-property assessments typically drop over time as equipment depreciates (she cited an example schedule: roughly 60% of value taxable in year one, falling to about 8% by year seven). She said communities can negotiate property-tax guarantees or community-benefit agreements but must ensure those terms are legally proportional and defensible.

In audience exchanges, Mills said that while some jurisdictions have seen electric rates rise with large data-center loads, other places have seen rates fall when added loads spread fixed system costs over more users. She recommended that counties ask for analyses that account for local grid capacity, the need for new renewable generation to meet clean-energy standards and the allocation of upgrade costs.

Mills noted regulatory roles: the Michigan Public Service Commission oversees utility planning and rate-setting; the Department of Environment, Great Lakes, and Energy (EGLE) regulates large water withdrawals and generator emissions at defined thresholds; and zoning authority rests with local governments guided by the Michigan Zoning Enabling Act.

The session closed with Mills offering attendees a guidebook and slides for follow-up and advising officials to consult legal counsel before pursuing time-limited moratoria or other land-use pauses. No formal action was taken by the Board of Commissioners during the meeting.