SALINE TOWNSHIP, Mich. – The Michigan Public Service Commission (MPSC) approved a controversial power deal for a data center in Saline Township.
The commission voted unanimously to okay the contracts, without a contested hearing, allowing DTE Energy to supply an initial 1.4 gigawatts of electricity to the Open AI-backed project, despite weeks of public pushback and emotional testimony.
This data center is set to be the largest data center in the country, covering 2.2 million square feet on a 575-acre site in Saline Township, with an additional 476 acres in nearby Bridgewater Township.
Related: Public pushback grows as Senate majority leader calls for transparency in Michigan data-center plans
DTE said the center won’t raise residential rates or strain the grid, but environmental groups, state officials and residents have questioned the process and long-term impacts.
The special contracts were approved with some conditions, including that if the company behind the project fails to make payments, DTE Energy will take the burden, and not the customers.
“Terms of the primary supply agreement between DTE Electric and the data center include additional requirements above and beyond standard terms used for customers under the utility’s D11 tariff rate for customers contracting for large energy loads,” according to a release from the MPSC.
The additional terms require the following:
- A minimum contract duration of 19 years, compared to the standard agreement of five years for a new customer of 1 MW or more of peak demand taking service under the general D11 tariff.
- A minimum billing demand of 80%, compared to 50-60% in the general D11 tariff. The data center operators will have to pay a minimum of 80% of the contracted electricity use even if their actual usage is lower.
- A termination payment of up to 10 years’ worth of minimum billing demand if the facility stops operating earlier than contracted to operate. There is no explicit reference to a termination payment included in the general D11 tariff.
“These protections will ensure that Michigan is able to reap the benefits of adding a significant new energy user to the grid while keeping any related costs off the utility bills of other customers,” MPSC Chair Dan Scripps said. “In written comments filed with the Commission and at a public hearing the MPSC held Dec. 3, the MPSC heard from thousands of Michiganders concerned about the risks of higher utility bills for everyday customers and reversal of progress the state has made in decarbonizing its energy production. The MPSC shares those concerns and finds that today’s approval enacts strong protections for ratepayers against the risk of stranded costs and cost subsidization. The order shields DTE Electric customers from future price risk while supporting economic development.”
Construction on the multi-billion-dollar campus is expected to begin next year.
Nessel released the following statement after regulators approved the contracts:
“After receiving more than 5,500 public comments, overwhelming opposition from community leaders, and bipartisan calls from public officials urging the Commission to slow down, I am extremely disappointed in the MPSC’s decision to fast-track DTE’s secret application to service this massive data center without holding a contested case hearing. While I am relieved that the Commission at least purports to have placed some conditions on DTE’s application, without being able to see the full, unredacted contract, and study the predicate conditions and enforcement mechanisms set by the Commission, it is impossible to verify any of these claims today. As Michigan’s chief consumer advocate, my office is reviewing the Commission’s order and considering what next steps we may be able to take to protect our residents.
“This secret contract still leaves Michiganders scrounging for hidden and vital details that could harm ratepayers should these AI corporations leave, move out of state, or simply go bankrupt. None of the conditions proposed by the Commission will bring these terms into public view, including what exit fee provisions might be in effect before December 2027.
“Rushing approval through an ex parte process lets DTE brush past important questions and shields the utility from the transparency the public deserves, and review by essential consumer protection organizations and offices such as mine, which I take personally as an elected official charged with protecting the consumers of this state.
“Our regulatory system only works if the process is done properly and transparently. When the utilities and MPSC cut corners, Michigan ratepayers are left unprotected. While this decision to forego a contested case is a major setback for consumer protection watchdogs, and a detriment to the public’s trust in their appointed government regulators, my office will continue to stand with ratepayers, demand transparency from utilities, and push for a regulatory process that puts Michiganders, not corporations, first.”
Attorney General Dana Nessel
DTE Energy released the following statement:
“We appreciate the Michigan Public Service Commission’s review and approval of our special contracts for Oracle’s data center project. These contracts protect our customers — including ensuring that there will be no stranded assets — while enabling Michigan’s growth. DTE Energy has an obligation to serve any customer, including data centers, that come into our electric service territory in southeast Michigan. That’s why we’ve been so focused on making sure our broader customer base is protected with these contracts to ensure they will not subsidize data center rates. We acknowledge there’s a range of viewpoints and emotions about this decision. We remain deeply committed to supporting our customers and the communities we serve by delivering the safe, reliable energy they depend on each day."
DTE Energy