University of Michigan Threatens Legal Action Over Water Moratorium for Nuclear Data Center

The University of Michigan has escalated a legal dispute over a proposed $1.2 billion, 220,000 square foot nuclear weapons research and AI data center in Ypsilanti Township. On April 22, the Ypsilanti Community Utility Authority (YCUA) imposed a 365-day moratorium on water delivery to hyperscale data centers in the area to conduct environmental sustainability and long-term water use studies.

On April 21—one day before the YCUA vote—the University of Michigan hand-delivered and emailed a legal threat to the YCUA, calling the moratorium “unlawfully discriminatory” against data centers. The university warned it would pursue “all rights and claims for relief” if its demands were not met.

Luther Blackburn, YCUA’s executive director, confirmed receipt of the legal communication but declined to comment on potential litigation. He stated:

“YCUA staff are working on a Request for Proposal to complete the investigations and studies outlined in the moratorium. I believe YCUA has acted lawfully and in accordance with industry best practices by issuing the moratorium.”

The University of Michigan disagreed, arguing in its letter that the moratorium is legally invalid. According to a copy obtained by 404 Media, the university cited multiple legal precedents and claimed the moratorium lacks justification:

The University objects to any such sector-specific moratorium which would be legally invalid because, among other defects, it would be unrelated to any documented utility or public health needs. As a threshold matter, a moratorium on utility service is permissible only when linked to legitimate utility considerations such as documented capacity constraints, public health issues, or genuine financing challenges.

The university further asserted that the YCUA has not demonstrated any capacity constraints. It referenced statements from YCUA leadership confirming that the proposed data center’s water usage—estimated at 200,000 gallons per day—falls well within the authority’s 8–10 million gallon daily capacity. The letter also noted that serving the facility could improve overall utility efficiency and cost distribution:

“The record contains no evidence supporting any such YCUA capacity constraint. To the contrary, YCUA’s leadership has publicly stated that serving the University’s proposed facility would not affect the authority’s ability to provide or treat water.” In addition, YCUA leadership has stated that serving the University's project would likely help mitigate overall utility costs by improving efficiency and cost distribution.

Sean Knapp, YCUA’s director of service operations, previously told Planet Detroit that the authority is operating below capacity. He explained that adding the data center as a customer would help reduce costs through improved efficiency:

“Adding the data center as a customer would help mitigate overall costs by improving efficiency and cost distribution.”

The University of Michigan also argued that the moratorium is pretextual and unlawfully discriminatory against data centers, though the letter did not specify further details.