City Council Unanimously Approves One-Year Moratorium on Data Centers and Battery Energy Storage Systems

PORTAGE, MI — The City of Portage has moved to halt new development of data centers and battery energy storage systems (BESS) with a moratorium that will remain in place until the end of 2026 or until the city can implement new zoning and regulatory measures.

The unanimous city council decision comes amid growing concerns from local residents about rising utility bills and potential environmental and safety risks associated with these energy-intensive facilities.

During a public hearing on the moratorium proposal Tuesday night, citizens said existing data and storage plants have driven up local utility bills in communities where they are already located and pose a physical and environmental threat.

Cheryl Lathrop, a Portage resident, expressed her concerns about already high Consumers Energy bills:

Cheryl Lathrop says her Consumers Energy bills are already high enough.

State Approves Massive Rate Hike as Data Centers Expand Across Michigan

The moratorium arrives as the Michigan Public Service Commission approved a $276.6 million rate increase for Consumers Energy, the largest authorized since at least 2004. The increase will take effect May 1 and adds an average $6.46 to residential monthly bills.

This timing has heightened concerns among Portage residents about whether additional data centers and battery storage facilities could further strain the local grid and drive up utility costs even more.

The $276.6 million increase to power rates, the largest authorized since at least 2004, will go into effect May 1. The utility says the hike is helping it improve reliability.

State officials, including Attorney General Dana Nessel, have challenged utility agreements tied to large-load energy contracts, warning that regulators must ensure existing ratepayers are not left subsidizing infrastructure built to support private development.

Data Centers Require Massive Infrastructure and Continuous Power

Data centers present unique challenges for local utilities and communities. Unlike traditional commercial or industrial users, data centers require:

  • Continuous, 24/7 electricity with no interruption
  • Massive cooling systems that increase energy demand
  • Dedicated infrastructure to ensure reliability
  • Significant water consumption for cooling systems

The state has already approved supplying up to 1.4 gigawatts of power to support large-scale data center operations tied to the Saline project in Washtenaw County. This level of consumption is roughly equivalent to the power demand of a mid-sized city.

Energy experts say the biggest challenge is not where data centers are built—but how they are powered.

Safety Concerns Over Fire Risk and Emergency Response

Residents have raised serious concerns about the fire risk associated with data centers and battery storage facilities. Jason Mikkelborg and Katelyn Clarey, two Portage residents, highlighted these dangers:

Jason Mikkelborg and Katelyn Clarey say the high-tech plants can create brand new kinds of cataclysms that most local public safety departments are not equipped to handle.

These facilities require specialized firefighting equipment and training that many local volunteer fire departments may not possess. The unique nature of lithium-ion battery fires means that standard firefighting techniques may not be effective.

Moratorium Gives City Time to Develop Regulations

The Portage City Council voted unanimously to impose the moratorium until the end of this year, or until they can put city zoning and ordinance amendments in place to regulate the operations.

Mayor Pro Tem Jim Pearson addressed concerns about the moratorium during the public hearing:

Mayor Pro Tem Jim Pearson had this to say.

The action represents an early step toward potential local regulation, with additional council action required before any moratorium takes effect. The proposed change would amend Chapter 42 of the city code to establish a temporary moratorium on the developments.

Portage Joins Growing List of Communities Seeking Data Center Restrictions

Portage is not alone in seeking restrictions on data center development. Across Michigan and the country, communities are weighing moratoriums on new data center projects as concerns grow about:

  • Land use and environmental impacts
  • Water consumption for cooling systems
  • Energy demand on local grids
  • Safety risks from fires and other incidents
  • Whether local governments have the technical expertise to evaluate projects of this scale

In Pavilion Township, officials last year delayed consideration of a proposed data center project after residents raised concerns during public meetings. A real estate firm, Franklin Partners, had requested a zoning change to allow what it described as "data warehousing facilities."

Economic Benefits Debate

Supporters of data center development point to clear economic benefits including:

  • Billions in capital investment
  • Construction jobs
  • Increased local tax revenue

However, critics argue those benefits may not match the long-term costs. Once operational, data centers typically employ relatively few full-time workers compared to their size and resource demands.

That imbalance is fueling skepticism in communities being asked to host them.

What Happens Next

The Portage City Council must take additional action to formally adopt the moratorium ordinance. Council members will need to consider whether to:

  • Implement a six-month moratorium as initially proposed
  • Extend the moratorium beyond the end of 2026
  • Develop comprehensive regulations for data center operations
  • Create a process for evaluating future data center applications

The moratorium represents a significant step in southwest Michigan's evolving relationship with data center development. As other municipalities across the state continue to grapple with similar issues, Portage's decision may influence policy discussions throughout the region.

Sources

  • WKZO: https://wkzo.com/2026/03/25/907151/
  • Watershed Voice: https://watershedvoice.com/2026/03/25/portage-moves-toward-data-center-pause-as-concerns-grow-nationwide/
  • MITechNews: https://mitechnews.com/update/michigan-data-centers-strain-power-grid-who-pays-for-the-energy-boom
  • Michigan.gov: https://michigan.gov/mpsc/commission/news-releases/2026/03/27/mpsc-goes-big-on-batteries
  • Michigan.gov Attorney General: https://www.michigan.gov/ag/news/press-releases/2026/03/27/mpsc-approves-276m-consumers-energy-rate-hike
  • CBS Detroit: https://www.cbsnews.com/detroit/news/consumers-energy-residential-electric-bills-increase-may-2026/