Michigan may soon give a massive tax break to data centers run by multi-billion dollar corporations that some believe will derail Gov. Gretchen Whitmer’s climate mandates.

State lawmakers sent House Bill 4906 and Senate Bill 237 to Whitmer last week to exempt “enterprise” data centers from sales and use taxes on equipment for at least the next 25 years, Planet Detroit reports.

The bills are a boon to tech giants like Google and Microsoft, which rely on the energy-hungry data centers to fuel growth in artificial intelligence, but are drawing complaints from environmentalists worried they will upend a government forced transition to “clean” energy approved by Democrats last year.

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“These tax breaks just blew a hole in their own clean energy package,” Christy McGillivary, legislative and political director for Michigan Sierra Club, told Planet Detroit.

The data centers will not only complicate climate goals approved by Whitmer to transition to 100% renewable energy by 2040, but will also draw as much as 5 million gallons of water per day to cool the facilities.

Opponents fear Michigan could end up utilizing a provision in last year’s climate legislation that allows the state to delay goals if energy capacity falls short, while driving up energy costs for residents who already pay some of the highest rates in the region for some of the least reliable service.

“Water and energy costs will be passed on to ratepayers,” said Abby Clark, with the Natural Resources Defense Council. “They could build these without tax breaks and still get favorable rates.”

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Clark noted Michigan’s industrial and commercial customers already pay much lower rates than residential customers, who have faced repeated double-digit rate hike requests in recent years.

Under the legislation, companies that invest at least $250 million and create or maintain at least 30 jobs in Michigan that pay at least 150% of local median wages would qualify for the tax breaks, which would through 2065 for facilities that locate on a brownfield site, Bridge Michigan reports.

Analysis from the Senate Fiscal Agency estimates the tax breaks will cost taxpayers more than $90 million.

Proponents contend that’s a small price to pay for economic development, and the tax revenues that come with it.

“This shows an opportunity for some real, big economic development projects here that will be critical for communities that really need the investment and the local property tax revenue,” Sen. Kevin Hertel, D-St. Clair Shores, told Bridge.

“As technology continues to advance, it is imperative that legislation allows the state to remain competitive economically,” state Rep. Joey Andrews, D-St. Joesph, told MLive. “Southwest Michigan’s abundant freshwater resources and reliable nuclear energy infrastructure make it an ideal destination for data centers, particularly with the growing demand for such facilities.”

Opponents point to state that are already hosting large data centers, noting the power demand at the centers forced utilities to delay the closure of fossil fuel plants, while residents are saddled with rate increases to cover infrastructure upgrades for the facilities.

“The legislation … falls far short of ensuring our rates won’t go up and we won’t see the rush to build additional fossil fuel plants to power these data centers,” Bob Allison with the Michigan League of Conservation Voters told MLive. “Because Michigan was unable to be a leader in setting out clearly how these large-scale projects operate, they will now face the same ‘not in my backyard’ opposition we’ve seen across this state in the past year, which is unfortunate and a major missed opportunity.”

Others opposed cite existing data centers in Michigan that have accepted tax breaks, but haven’t produced the jobs promised.

At a Switch data center at a former Steelcase facility in Kent County’s Gaines Township, the company promised 1,000 jobs when it landed massive tax breaks in 2015. By 2022, the company had only created 26 with pay at less than $38,000 a year, but received another $1 million annual tax break anyway, according to Bridge.

“Microsoft does not need our tax dollars,” Sean McBrearty, state director for Clean Water Action, told the news site. “Michiganders need that.”

HB 4906 and SB 237 cleared the legislature with bipartisan support and bipartisan opposition, approved in late night votes on Thursday. Whitmer has not taken a public position on the legislation, “but both supporters and opponents see her as a behind-the-scenes supporter,” Bridge reports.