How data centers factor into DTE’s 20-year power plan
Michigan regulators are evaluating DTE Energy's 20-year power plan, which includes building two natural gas plants and doubling electric capacity, largely driven by demand from data centers operated by Oracle, OpenAI, and Google. Environmental groups are raising concerns about the climate and air quality impacts of these plants and the financial burden on ratepayers. The Michigan Public Service Commission's decision will determine the future of energy supply and environmental policy in Southeast Michigan.
The Michigan Public Service Commission (MPSC) is currently reviewing DTE Energy's 20-year Integrated Resource Plan (IRP), which proposes the construction of two new natural gas plants in Milan Township, Monroe County, and Handy Township, Livingston County. This plan would significantly increase the utility's electric capacity for its 2.3 million Southeast Michigan customers. Environmental advocacy groups, including Earthjustice, the Environmental Law and Policy Center, and the Sierra Club, contend that these new facilities are primarily needed to serve the substantial power demands of data centers, specifically citing Oracle and OpenAI's 1.4-gigawatt facility in Saline Township and Google's proposed 1-gigawatt data center in Van Buren Township.
DTE Energy, however, maintains that the new gas plants are essential to replace the Monroe coal plant, which is slated for retirement in phases by 2032. Company spokesperson Colleen Rosso stated that the loss of 3 GW from the coal plant's retirement is the main reason for the increased natural gas generation, alongside evolving state and federal energy policies and new reliability requirements from the Midcontinent Independent System Operator (MISO). DTE CEO Joi Harris also emphasized the utility's commitment to an "all of the above" energy mix and achieving significant carbon emission reductions by 2035, partly through future carbon capture technology at the new gas plants.
Environmental groups and Attorney General Dana Nessel are expressing strong concerns regarding the climate impact of burning natural gas, a potent greenhouse gas, and the potential for residential ratepayers to bear the costs of new power plants and associated infrastructure, including potential "stranded assets" if data centers consume less power than projected. Helen Li, an attorney with Earthjustice, noted her organization is litigating cost allocation for large load customers like data centers as part of DTE's electric rate hike case. DTE spokesperson Rosso assures that data centers will cover their costs through special power contracts with protections like minimum billing requirements. The MPSC's decision on DTE's IRP, expected within 300 days for initial review, and specifically on Google's power contracts, carries major implications for Michigan's climate action, electricity rates, and air quality.