Michigan Regulators Consider DTE Energy Contracts for Google Data Center, Amid Ratepayer Concerns

The Michigan Public Service Commission (MPSC) is scheduled to decide on Thursday whether to approve DTE Energy's contracts for Google's 1-gigawatt data center in Van Buren Township. This marks the first contested rate case for a hyperscale data center in Michigan, following a prior contentious "ex parte" approval by the MPSC in December for DTE contracts with Oracle and OpenAI's 1.4-gigawatt data center in Saline Township, which limited public input.

Michigan Attorney General Dana Nessel and various environmental and ratepayer advocacy groups are strongly opposing the Google contracts. Nessel warns that current provisions could expose ratepayers to infrastructure costs if the data center uses less power than anticipated or closes prematurely. She has pushed for a higher minimum billing demand of 90% (up from DTE's proposed 80%) and a full 100% minimum billing demand for early termination payments. Environmental groups, including the Sierra Club represented by Earthjustice, are also pressing DTE to commit to bringing the full amount of promised renewable energy and energy storage online for the project, and to avoid reliance on new natural gas plants.

DTE Energy and Google, however, maintain that the proposed agreements ensure Google will cover all electricity and infrastructure costs and offer "positive affordability benefits" for existing customers. DTE plans to seek approval for new natural gas plants in its upcoming integrated resource plan, with President and CEO Joi Harris acknowledging that each additional 1 GW data center could necessitate a new natural gas plant. Despite DTE's assurances that it will not seek to recoup losses from other customers, Nessel and other intervenors, including the Environmental Law & Policy Center, express skepticism, citing potential impacts on DTE's financial standing and future electric rate hike cases.