Michigan energy regulators are holding a hearing Wednesday evening that could help determine the course of a planned data center project near Ann Arbor. The project is tied to tech companies Oracle and OpenAI.
DTE Electric is asking the state to speed up approval of special contracts to supply the project’s massive energy needs. The company estimates it would need to increase its total peak capacity by about 25% to power the 1.4 gigawatt data center.
(For context, one gigawatt is about the equivalent of 100 million LED bulbs and far more than what's generated by a typical nuclear power plant.)
Wednesday’s Michigan Public Service Commission hearing is to get public feedback on the matter. Critics have argued the project should go through a much longer review process, called a "contested case," in which the commission is required to consider testimony and evidence from an array of industry and advocacy groups.
It's one of several planned or proposed data centers in Michigan that are meant to help feed the AI boom but are sparking fierce controversy in some communities.
State Representative Morgan Foreman (D-Pittsfield Twp) represents Saline Township, the planned site of the data center. She said the companies behind the project haven’t done enough to address community concerns.
“The developers have made big promises. Responsible water and energy use, job creation, community investment, and funding of major energy storage projects. But we are also concerned that this will increase rates if there’s some type of issue, if they decide to back out,” Foreman said.
In its request to the public service commission for an accelerated timeline, DTE promised the data center would not lead to rate increases for everyday customers.
“The framework reflects a reasonable and appropriate balance between the advantages of serving a new large load customer and protecting existing customers from risk and potential cost subsidies,” DTE attorney Andrea Hayden wrote.
Michigan Attorney General Dana Nessel said there are too many unknowns about the DTE special contracts to take the companies at their word. In the proposed contracts posted to the state public service commission's website, paragraphs and sections are sometimes blacked out.
“They have to build out at least, minimally, $500 million in additional structures, power plants, batteries so forth in order to power this project. And it could be much higher than that. How do we know that DTE customers aren't going to be left holding the bag later on?” Nessel said.
Supporters of the data center, however, argued Michigan has policies to keep that from happening.
State Representative Joey Andrews (D-St. Joseph) cosponsored new data center-friendly laws that passed last year. One of those new laws includes wording to stop data centers from paying less than other industrial customers or passing costs onto other customers.
Andrews said the Saline Township data center would be a win for Michigan and an aid to local electric customers.
“It’s going to effectively help keep their electric rates down going into the future, both because costs can’t be passed on and because the data centers are going to be effectively overpaying for electricity. And that’s before you talk about them doing the battery buildouts and the grid upgrades,” he said.
Regarding the optics of DTE asking to hurry the process along, Andrews said he understood the argument for more public hearings. Though he believes “faster is better” in some cases.
“When you add stops and time delays and more hearings into a process, you inevitably end up increasing the costs and risk involved in the project and that’s whether it’s a data center or any other large load user,” Andrews said.
Foreman, who said she saw the need for data centers and recognized the benefits they could bring to the state in general, worried the way this process is playing out may have spoiled the appetite for them elsewhere.
“Now people are going to, the minute they hear data center, their antennas are going to go up and they are going to be super against it. They don’t want the energy, the heat, any of that, or just the environmental impacts, the construction, they don’t want any of this in their back yard, in their community,” Foreman said.
In a November 26 filing, DTE said it needed contract approval from the public service commission by December 5 -- Friday -- or the project could risk falling through. Wednesday’s hearing is just to get public feedback.
The commission has another planned meeting on Friday. The agenda for that meeting hasn’t been released yet.
