Michigan Regulators Greenlight the State’s Inaugural Hyperscale Data Center
Despite facing criticism for acting too swiftly, state utility regulators recently approved DTE Energy’s proposal to power Michigan’s first hyperscale data center. This decision comes with a series of conditions aimed at protecting ratepayers from potential subsidies for the facility.
The approval, which took place amidst vocal opposition in a Lansing conference room, was met with cheers from business advocates but drew ire from skeptics who demanded a more thorough public review of the 19-year agreement.
Michigan Public Service Commission Chair Dan Scripps defended the decision, stating, “I would put the contracts that are in front of us today on par or better with any that have been approved in the country.” He and other commissioners concluded that the deal would save ratepayers money without compromising energy reliability.
However, numerous public speakers condemned the vote, expressing concerns about the loss of farmland and habitat, rising power rates, and climate pollution from fossil fuels used to power the data centers. Tim Bruneau, a resident of Saline Township, voiced his fears, saying, “We won’t be happy, I suppose, until the Great Lakes run dry, until the farmlands all are gone, until all the air is polluted… And guess what happens when that happens? We’re extinct.”
This decision enables tech firms OpenAI, Oracle, and Related Digital to collaborate on the $7 billion Stargate facility, which will span 575 acres south of Ann Arbor in Saline Township. The facility is designed to house massive buildings filled with computer servers that will train artificial intelligence models.
DTE spokesperson Ryan Lowry praised the commission’s order, asserting that the contracts “protect our customers — including ensuring that there will be no stranded assets — while enabling Michigan’s growth.” Supporters view the project as a significant economic development opportunity, promising millions in annual taxes and 450 permanent jobs. However, opponents argue that these benefits do not justify the environmental risks posed by energy-hungry data centers.
The Stargate project is expected to demand 1.4 gigawatts of energy, equivalent to the consumption of a large American city. The commission’s decision comes amid concerns that residential ratepayers might end up subsidizing the infrastructure needed to deliver this power.
Commissioners concurred with DTE’s assertion that the deal with Oracle subsidiary Green Chile Ventures would save ratepayers $300 million annually by having the tech firm cover battery storage and other connection costs. “That is a real cost savings at a time when affordability is so important,” noted Commissioner Katherine Peretick.
In a recent filing, DTE requested expedited approval of the contract without a public hearing, a move that Attorney General Dana Nessel and other skeptics criticized, arguing that the heavily redacted proposal made it difficult to assess DTE’s claims of affordability.
Strings attached
In response to public concerns, the commission added several conditions to their approval, giving DTE 30 days to comply. Among the most significant stipulations, DTE must absorb any financial losses if the projected $300 million savings do not materialize.
Other requirements include:
- In the event of an electricity shortage, the data center must be curtailed before other electric customers.
- DTE must provide documentation on how it will cover data center-related costs without subsidies from other customers, including renewable energy installations as mandated by Michigan’s clean energy law.
- DTE must file an application for a standard rate structure for major power users like hyperscale data centers within 90 days.
- Quarterly reports tracking the data center’s power demand and an annual assessment of Green Chile’s finances must be submitted.
Scripps emphasized that the contract terms and additional conditions led the commission to believe they could meet the standards of reasonableness and public interest. The projected power demand from the data center would increase DTE’s electric load by 25%, which the utility plans to manage without constructing new power plants.
As DTE aims to accommodate up to 8.4 gigawatts of total data center load in the coming years, concerns about potential pollution and strain on Michigan’s water and electricity systems have prompted bipartisan pushback, including a new bill to repeal tax exemptions that have attracted the industry to the state.
Industry supporters argue that Michigan risks falling behind economically if it does not embrace the growing hyperscale sector. They assert that while data centers may not create many jobs, they are crucial to a broader tech economy where Michigan is striving to compete.
Since the enactment of a 6% sales and use tax exemption for hyperscale facilities, Michigan has seen a surge in publicly announced proposals, rising from zero to at least 15. Some localities have imposed moratoriums on data center development to create regulations addressing noise and other concerns. In Saline Township, a resident has even filed a legal intervention to block the Stargate project, alleging violations of the Open Meetings Act.
In addition to utility contracts, developers must secure permits from the Michigan Department of Environment, Great Lakes and Energy for diesel-powered backup generators and construction activities that could impact wetlands and the Saline River.
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This story was originally published by Bridge Michigan and distributed through a partnership with The Associated Press.
Copyright 2025 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Topics
Michigan
Despite facing criticism for acting too swiftly, state utility regulators recently approved DTE Energy’s proposal to power Michigan’s first hyperscale data center. This decision comes with a series of conditions aimed at protecting ratepayers from potential subsidies for the facility.
The approval, which took place amidst vocal opposition in a Lansing conference room, was met with cheers from business advocates but drew ire from skeptics who demanded a more thorough public review of the 19-year agreement.
Michigan Public Service Commission Chair Dan Scripps defended the decision, stating, “I would put the contracts that are in front of us today on par or better with any that have been approved in the country.” He and other commissioners concluded that the deal would save ratepayers money without compromising energy reliability.
However, numerous public speakers condemned the vote, expressing concerns about the loss of farmland and habitat, rising power rates, and climate pollution from fossil fuels used to power the data centers. Tim Bruneau, a resident of Saline Township, voiced his fears, saying, “We won’t be happy, I suppose, until the Great Lakes run dry, until the farmlands all are gone, until all the air is polluted… And guess what happens when that happens? We’re extinct.”
This decision enables tech firms OpenAI, Oracle, and Related Digital to collaborate on the $7 billion Stargate facility, which will span 575 acres south of Ann Arbor in Saline Township. The facility is designed to house massive buildings filled with computer servers that will train artificial intelligence models.
DTE spokesperson Ryan Lowry praised the commission’s order, asserting that the contracts “protect our customers — including ensuring that there will be no stranded assets — while enabling Michigan’s growth.” Supporters view the project as a significant economic development opportunity, promising millions in annual taxes and 450 permanent jobs. However, opponents argue that these benefits do not justify the environmental risks posed by energy-hungry data centers.
The Stargate project is expected to demand 1.4 gigawatts of energy, equivalent to the consumption of a large American city. The commission’s decision comes amid concerns that residential ratepayers might end up subsidizing the infrastructure needed to deliver this power.
Commissioners concurred with DTE’s assertion that the deal with Oracle subsidiary Green Chile Ventures would save ratepayers $300 million annually by having the tech firm cover battery storage and other connection costs. “That is a real cost savings at a time when affordability is so important,” noted Commissioner Katherine Peretick.
In a recent filing, DTE requested expedited approval of the contract without a public hearing, a move that Attorney General Dana Nessel and other skeptics criticized, arguing that the heavily redacted proposal made it difficult to assess DTE’s claims of affordability.
Strings attached
In response to public concerns, the commission added several conditions to their approval, giving DTE 30 days to comply. Among the most significant stipulations, DTE must absorb any financial losses if the projected $300 million savings do not materialize.
Other requirements include:
- In the event of an electricity shortage, the data center must be curtailed before other electric customers.
- DTE must provide documentation on how it will cover data center-related costs without subsidies from other customers, including renewable energy installations as mandated by Michigan’s clean energy law.
- DTE must file an application for a standard rate structure for major power users like hyperscale data centers within 90 days.
- Quarterly reports tracking the data center’s power demand and an annual assessment of Green Chile’s finances must be submitted.
Scripps emphasized that the contract terms and additional conditions led the commission to believe they could meet the standards of reasonableness and public interest. The projected power demand from the data center would increase DTE’s electric load by 25%, which the utility plans to manage without constructing new power plants.
As DTE aims to accommodate up to 8.4 gigawatts of total data center load in the coming years, concerns about potential pollution and strain on Michigan’s water and electricity systems have prompted bipartisan pushback, including a new bill to repeal tax exemptions that have attracted the industry to the state.
Industry supporters argue that Michigan risks falling behind economically if it does not embrace the growing hyperscale sector. They assert that while data centers may not create many jobs, they are crucial to a broader tech economy where Michigan is striving to compete.
Since the enactment of a 6% sales and use tax exemption for hyperscale facilities, Michigan has seen a surge in publicly announced proposals, rising from zero to at least 15. Some localities have imposed moratoriums on data center development to create regulations addressing noise and other concerns. In Saline Township, a resident has even filed a legal intervention to block the Stargate project, alleging violations of the Open Meetings Act.
In addition to utility contracts, developers must secure permits from the Michigan Department of Environment, Great Lakes and Energy for diesel-powered backup generators and construction activities that could impact wetlands and the Saline River.
___
This story was originally published by Bridge Michigan and distributed through a partnership with The Associated Press.
Copyright 2025 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Topics
Michigan
