*PORTAGE, MI* — The City of Portage has paused plans for data centers and battery storage facilities through the end of 2026, citing growing concerns from residents about rising utility bills and infrastructure strain.

The unanimous city council vote marks an early step toward potential local regulation of these facilities, which have become a flashpoint in communities across Michigan and the country as artificial intelligence and cloud computing demands surge.

A Moratorium Until Further Notice

During a public hearing on Tuesday, March 24, the Portage City Council unanimously voted to direct staff to prepare an amendment to the city code that would establish a temporary moratorium on data centers and battery energy storage systems, known as BESS.

The action does not immediately enact the moratorium. Instead, it sets the stage for future council consideration once city staff finalize the proposed changes to Chapter 42 of the city code.

The council vote came without discussion and was unanimous, according to city records. The moratorium would pause new development related to data centers and battery storage while the city considers how to regulate these facilities long-term.

City officials did not specify the length of the proposed moratorium during the meeting, but the current pause extends through the end of 2026.

Residents Speak Out

The public hearing drew vocal opposition from residents who say existing data centers in their communities have already driven up utility costs.

Cheryl Lathrop told the council her Consumers Energy bills are already too high, even without a data center.

Last month, my energy usage was 37 percent less than an energy-efficient home. Yet, my energy bill was just shy of $145, Lathrop said.

Lathrop worried that families would not be able to afford energy costs if there is not a moratorium.

I can't imagine what a family, where they have two to four children, what they're paying for their utility rates if I'm paying just shy of $145, when I don't use hardly any energy. If our energy bills skyrocket, people aren't going to be able to pay their energy cost, she said.

Other residents expressed concerns about fire risks and the physical and environmental threats posed by these facilities, according to local news reports.

Statewide Context

The Portage action mirrors a broader trend across Michigan and the nation as local governments grapple with how to regulate data centers. These facilities require significant infrastructure, including land, electricity, and water.

Demand for data centers has grown rapidly in recent years alongside cloud computing and artificial intelligence technologies. That growth has brought increased scrutiny from communities and officials.

In some communities across the U.S., residents and local officials have raised concerns about the large amounts of electricity required to operate data centers, potential strain on local power grids, water use for cooling systems, and noise from cooling equipment and backup generators.

At the federal level, U.S. Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez announced plans on March 25 for their own moratorium to introduce legislation aimed at pausing certain artificial intelligence and data center development while federal standards are considered.

Michigan's Grid Under Pressure

Michigan's push to become a hub for artificial intelligence infrastructure is running into a hard constraint: the electric grid. As hyperscale data centers expand across the United States, their massive energy demands are forcing utilities, regulators, and local communities to confront a difficult question—how to power the next generation of computing without driving up costs or straining reliability.

A massive proposed data center near Saline has become the focal point of the state's growing tension between economic development and infrastructure limits. Plans call for a facility capable of consuming more than a gigawatt of electricity—roughly equivalent to the power demand of a mid-sized city.

That level of consumption has shifted the conversation away from zoning disputes to something far more consequential: Whether Michigan's power grid can keep up.

Utilities including DTE Energy and Consumers Energy have argued in filings before the Michigan Public Service Commission that large-load customers such as data centers should be responsible for the incremental costs required to serve their operations, including interconnection and infrastructure upgrades.

However, regulators and consumer advocates are continuing to scrutinize whether broader system-wide upgrades needed to support long-term demand growth could still place upward pressure on rates for existing customers.

That question is quickly becoming the most contentious part of the debate. Large-scale data centers often require new substations, expanded transmission lines, and significant upgrades to existing grid infrastructure.

State Officials Raise Red Flags

The issue has already drawn scrutiny from top state officials. Dana Nessel has 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.

Her office has pushed for additional review of how these agreements are structured, signaling that oversight of data center energy deals is likely to intensify.

Last year, the MPSC approved a $154 million electric rate hike for Consumers Energy. Since 2020, regulators have approved nearly $800 million in total annual revenue increases for the company.

Nessel said her office has helped Michigan consumers save more than $4.1 billion by intervening in utility cases since she took office.

Local Pushback Is Growing

The controversy in Saline reflects a broader statewide trend. Across Michigan, communities are weighing restrictions or moratoriums on new data center projects.

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.

The Portage action represents an early step toward potential local regulation, with additional council action required before any moratorium takes effect.

Economic Benefits Vs. Community Costs

Supporters of data center development point to clear economic benefits, including billions in capital investment, construction jobs, and increased local tax revenue.

But 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's Next

The Portage City Council will need to approve the final code amendment before the moratorium takes effect. Council members will have to vote on the staff-prepared changes at a future meeting.

The moratorium would remain in place until the city can put zoning and ordinance amendments in place to regulate the operations, or until the end of 2026, whichever comes first.

Portage joins other local governments across the state as it seeks to protect its communities from the growing strain of data center development. The city's decision highlights the tension between economic development and infrastructure capacity in an era of rapid technological change.

Sources

  • Portage moves toward data center pause as concerns grow nationwide – Watershed Voice: https://watershedvoice.com/2026/03/25/portage-moves-toward-data-center-pause-as-concerns-grow-nationwide/
  • Portage hits 'pause' on data centers and BESS facilities – WMUK: https://www.wmuk.org/wmuk-news/2026-03-26/portage-hits-pause-on-data-centers-and-bess-facilities
  • Portage puts moratorium on data centers, battery storage facilities – WKZO: https://wkzo.com/2026/03/25/907151/
  • Michigan's Data Center Boom Collides With Grid Reality: Who Really Pays the Price? – MITechNews: https://mitechnews.com/update/michigan-data-centers-strain-power-grid-who-pays-for-the-energy-boom/
  • Michigan regulators approve $276.6M Consumers Energy rate hike – What that means for residents – ClickOnDetroit: https://www.clickondetroit.com/news/local/2026/03/28/michigan-regulators-approve-2766m-consumers-energy-rate-hike-what-that-means-for-residents/