Who Pays to Fix Michigan’s Dams? The Answer May Be No One — At Least Not Yet

And right now, the numbers do not work.

In Part 1 of this MITechNews series, we looked at the growing safety risks tied to Michigan’s aging dams, from recent flooding concerns in northern Michigan to the broader warning sign sent by Consumers Energy’s effort to sell 13 dams for $1 each. The next question is just as important: Who is actually going to pay to fix, remove, or rebuild these structures?

So far, the answer appears to be a patchwork of state grants, limited emergency funds, federal programs, local governments with tight budgets, and private owners who often lack the resources — or the incentive — to make large investments.

Michigan Has Put Real Money on the Table — But Not Enough

To be fair, Michigan has not ignored the issue.

EGLE’s Dam Risk Reduction Grant Program was launched with a $13 million appropriation in 2021, followed by another $43.2 million in 2022. In May 2025, EGLE announced an additional $14.9 million for 19 dam projects ranging from removals to urgent maintenance. EGLE later said the program had invested nearly $44 million over three fiscal years to help repair or remove 57 dams statewide.

The state also created a $6 million Dam Safety Emergency Action Fund for urgent repairs, with about $3 million still remaining before the end of fiscal year 2026, according to EGLE.

That is real progress, especially after the 2020 Edenville and Sanford dam failures forced a reckoning in Lansing. EGLE says it also expanded its Dam Safety Unit from two staff members to eight and standardized enforcement practices after the disaster.

But here is the problem: even taken together, those amounts still look small compared with the size of the risk.

The State’s Own Task Force Envisioned a Much Bigger Response

After the Midland-area dam failures, Michigan created the Dam Safety Task Force to evaluate the statutory structure, budget, and program design of EGLE’s dam safety program, along with the adequacy of state standards and the level of investment needed in Michigan’s dam infrastructure. The task force submitted its final report to Gov. Gretchen Whitmer and the Legislature in February 2021.

Its recommendations make clear that Michigan’s current spending was never intended to be the endpoint.

The task force called for:

• a revolving loan program capable of funding up to $20 million per year for 20 years, or $400 million total, for dam improvements, maintenance, and removals;
• a matching grant program of up to $80 million to drive priority risk-reduction work;
• $750,000 annually in matching grants for scoping and design work;
• and a dedicated dam safety emergency fund with an initial $5 million investment.

In other words, the state’s own blue-ribbon group was pointing toward a funding framework measured in the hundreds of millions of dollars over decades, not one-time bursts of tens of millions.

That is the heart of the problem.

Michigan’s current grants may help stabilize the most urgent cases. They do not yet amount to a permanent financing system.

[ DAM FAILURE EVENT ]
↓
┌──────────────────────────────┐
│ Emergency Response │
│ (Police, Fire, Evacuations) │
│ → Local + State │
└──────────────────────────────┘
↓
┌──────────────────────────────┐
│ Infrastructure Damage │
│ (Roads, Bridges, Utilities) │
│ → State + Federal (FEMA) │
└──────────────────────────────┘
↓
┌──────────────────────────────┐
│ Property Loss │
│ (Homes, Businesses) │
│ → Homeowners + Insurance │
└──────────────────────────────┘
↓
┌──────────────────────────────┐
│ Environmental Cleanup │
│ (Debris, Sediment, Water) │
│ → State + Federal │
└──────────────────────────────┘
↓
┌──────────────────────────────┐
│ Legal + Liability Costs │
│ (Lawsuits, Settlements) │
│ → Owners / Courts │
└──────────────────────────────┘
↓
┌──────────────────────────────┐
│ Long-Term Recovery │
│ (Rebuilding, Economic Loss) │
│ → Taxpayers (All Levels) │
└──────────────────────────────┘

Local Governments Often Cannot Carry the Load

Even when communities want to keep a dam, many cannot afford the engineering, design, construction, legal, and long-term maintenance costs that come with ownership.

EGLE has said plainly that many dam owners and local governments lack the financial capacity to address decades of deferred maintenance. It has also warned that public pressure to preserve recreational lakes and ponds can delay necessary safety actions, even when a structure is deteriorating.

That puts counties, townships, drain commissioners, and city officials in a bind.

If they move to remove a dam, they may face backlash from lakefront property owners, tourism businesses, and residents who value boating, fishing, or aesthetics. If they try to keep it, they may inherit a multi-million-dollar obligation with no stable revenue source to support it. And if they do nothing, they risk being the next community facing an emergency drawdown, structural failure, or downstream flooding event.

That is why the funding question matters so much. It is not just about engineering. It is about whether a small rural county or local authority can realistically absorb a cost that used to sit with a utility, private industrial owner, or long-defunct operator.

Federal Money Can Help — But It Is Not a Cure-All

Michigan is not entirely on its own.

FEMA’s High Hazard Potential Dams grant program provides technical, planning, design, and construction assistance for rehabilitation of eligible dams, and Michigan projects have continued to move through that pipeline. FEMA issued public notices in 2025 and 2026 tied to rehabilitation funding for Sanford Dam in Midland County and Lake Shamrock Dam in Clare. Michigan’s 2024 Hazard Mitigation Plan also specifically references compliance with FEMA’s High Hazard Potential Dams program.

That is important.

But federal money tends to be project-specific, competitive, and slow-moving. It is not designed to replace a broad state-level financing strategy for hundreds of aging structures across a large dam inventory.

And Michigan’s inventory is large. EGLE says the state has more than 2,500 publicly and privately owned dams, regulates more than 1,000 based on height and hazard potential, and counts more than 160 high-hazard dams, with about 15% of those either rated in poor condition or lacking a current rating.

That is not a problem FEMA can solve by itself.

National Numbers Suggest the Funding Gap Is Massive

National data from the Association of State Dam Safety Officials puts Michigan’s challenge in context.

ASDSO estimates the cost to rehabilitate the nation’s non-federal dams at $165.2 billion, including $37.4 billion for non-federal high-hazard-potential dams alone. The group also notes that dam owners are generally responsible for operation, maintenance, repair, rehabilitation, replacement, and, in many cases, downstream consequences from failure.

Michigan’s exact share of that national need is not broken out in those figures. But the direction is obvious: if the national price tag is that high, it is hard to argue that Michigan’s current level of spending is remotely sufficient for the long haul.

The Real Debate Is Just Beginning

The state has made meaningful moves since Edenville. That matters.

But the next phase of this debate is going to be tougher, because it will force Michigan policymakers to answer a question they have so far only partially addressed:

Is dam safety a one-time emergency issue, or is it a permanent infrastructure obligation?

If the answer is the second — and the evidence increasingly suggests it is — then Michigan will need more than sporadic grants. It will need a long-term funding model, clearer owner accountability, and a realistic strategy for deciding which dams should be repaired, which should be removed, and which communities cannot be left to fend for themselves.

Because when a dam owner wants out, the bill does not vanish.

It just starts looking for a new address.

Coming Next in the MITechNews series

• Save Them or Remove Them? The difficult trade-offs between safety, cost, environmental impact, and local economies
• The Rural Economy Behind the Reservoirs How dams support tourism, property values, and small businesses across Michigan
• Michigan’s 1930s Dams Meet 2026 Reality How New Deal-era infrastructure is colliding with modern climate and budget pressures
• When Owners Walk Away What happens to liability, maintenance, and risk when the private sector exits aging dam assets