The Michigan Public Service Commission (MPSC) has approved a significant power contract for a controversial data center project in Saline Township. This unanimous decision, made without a contested hearing, allows DTE Energy to supply an initial 1.4 gigawatts of electricity to what is set to become the largest data center in the United States. The facility will span 2.2 million square feet across a 575-acre site in Saline Township, with an additional 476 acres in nearby Bridgewater Township.
Despite significant public opposition and emotional testimonies from concerned citizens, the MPSC voted to approve the contract, citing economic development benefits. The commission stated that the data center would not lead to increased residential rates or overburden the electrical grid. Nonetheless, environmental groups and local officials have raised serious concerns about the long-term impacts of such a large-scale project.
Contract Details and Conditions
The MPSC emphasized that the special contracts approved for DTE Energy include specific protections for consumers. If the project developers fail to meet payment obligations, DTE Energy will absorb those costs rather than passing them on to customers. The contract stipulates several key terms:
– A minimum contract duration of 19 years, significantly longer than the usual five years for new customers requiring large energy loads.
– A minimum billing demand of 80%, compared to the 50-60% range typically seen in standard contracts. This means the data center must pay for at least 80% of the electricity contracted, regardless of actual usage.
– A termination payment that could reach up to 10 years’ worth of minimum billing demand if the facility ceases operations before the end of the contract term.
MPSC Chair Dan Scripps remarked, “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.” He noted that the MPSC had received thousands of comments expressing concerns about potential increases in utility bills and the state’s progress in decarbonizing energy production.
Public Response and Future Steps
Following the decision, Attorney General Dana Nessel expressed her disappointment, highlighting the overwhelming public opposition to the project. After receiving more than 5,500 public comments and bipartisan calls for transparency, she criticized the commission for fast-tracking the approval without a contested case hearing.
Nessel stated, “This secret contract 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.” She emphasized the need for transparency, calling the lack of detailed public review a significant setback for consumer protection. Her office is currently reviewing the MPSC’s order to determine potential next steps to safeguard residents.
In response to the approval, DTE Energy affirmed its commitment to ensuring that its broader customer base remains protected under the new contracts. The company stated, “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.”
Construction on the multi-billion-dollar data center is slated to begin in 2024, marking a significant shift in the landscape of energy consumption in Michigan and raising ongoing discussions about the balance between economic development and environmental responsibility.
