Nessel joins Ann Arbor area lawmakers, environmentalists demanding scrutiny of DTE data center deal

BY KYLE DAVIDSON, MICHIGAN ADVANCE

MICHIGAN—One of the state’s largest energy companies is asking energy regulators to fast track approval of two contracts to provide power to a data center planned for construction in Saline Township, but environmental advocates and state officials have banded together to demand greater transparency into the details.

DTE Energy on Oct. 31 filed a request for ex parte approval seeking two contracts to supply 1.4 gigawatts of energy to a facility under development by ChatGPT creator Open AI, Oracle and Related Digital.

Michigan Attorney General Dana Nessel filed a request to intervene in the case, requesting the Michigan Public Service Commission. which oversees energy utilities in the state, view the matter as a contested case. That would allow different parties to intervene, request discovery and file testimony for the commission to review before making a decision on the contracts.

While DTE maintains that its contracts with the energy-intensive facility will not result in higher rates for its customers, Nessel said the plan lacks clarity on how consumers would be protected.

Though the commission has set a date for a virtual public hearing ahead of its next meeting, Nessel has argued that without a contested case declaration, the hearing amounts to “performative listening rather than thorough public scrutiny.”

“This is all highly unusual, to say the least,” Nessel said in a Zoom call on Tuesday. “DTE itself is anticipating it will spend half a billion dollars to service this new customer, making unverified promises nobody else will shoulder these costs, and urging the commission to fast track this application without any of the normally prescribed public scrutiny.”

While The Sierra Club, Michigan Environmental Council, Natural Resources Defense Council and Citizens Utility Board of Michigan have also requested a contested case hearing, Nessel said that there is no indication the commission will hear their requests for intervention. That’s raised concerns over the commission facing political pressure to move forward on the deal without public input.

Matt Helms, a public information officer for the commission, declined to comment.

In an email to Michigan Advance, DTE’s Director of Corporate Communications Jill Wilmot, said the state’s regulatory process allows companies to file for an uncontested approval of contracts if there is no cost of service increase to customers.

“To that end, DTE Electric is following the defined process for filing this regulatory request,” Wilmot said.

Wilmot added that the data center is also footing the cost of a battery storage project to help meet energy demand at the facility.

Nessel noted that the public does not have the option to read over the full contract because there is no public version available, or at least without heavy redactions.

“My call here today is not that data centers don’t belong in Michigan, that they can’t be managed responsibly and regulated fairly. It’s actually quite the opposite of that; that we can regulate these entities responsibly, and therefore we have an obligation to do so,” Nessel said. “These special contracts will control how hundreds of millions of utility dollars are spent. I don’t think we’re being alarmist here by saying that deserves even just the most basic process and access the commission typically affords our offices.”

State Sen. Jeff Irwin (D-Ann Arbor), who represents the area where the data center is being sited, said there are tremendous concerns within the community about the resource demands from the data center.

Some of those concerns include whether the facility will dry up wells or bring skyrocketing energy rates with it; and how the data centers coming into the state will impact the state’s goal of meeting a 100% clean energy standard by 2040.

Charlotte Jameson, the chief policy officer for the Michigan Environmental Council, said that in order to meet the state’s clean energy goals, it must rely heavily on renewable energy and battery storage. However, when significant new loads are added to the energy grid, utilities often rush to build natural gas plants, Jameson added. DTE has already discussed plans to replace its Monroe Coal Plant with a gas plant, alongside other gas plants under consideration.

Although natural gas plants are included in the law’s definition of clean energy systems, and the plants must utilize 90% effective carbon capture and storage technology, the Institute for Energy Economic and Financial Analysis has questioned the effectiveness of the technology, warning that it could increase carbon dioxide emissions.

DTE has submitted testimony in the case detailing how the Saline Township project would impact their ability to remain within Michigan’s clean energy goals, but the company’s plan is sparse on details, Jameson said. The lack of transparency has raised additional questions on whether the company will need to pursue an extension to comply with the state’s clean energy requirements.

State Rep. Morgan Foreman (D-Pittsfield Township) said the deal has implications beyond Saline Township.

“This is a precedent setting decision for the future of data centers and AI development in Michigan,” Foreman said. “If we allow one utility to bypass public engagement, we open the door for it to happen again and again and again and again.”

For residents concerned about the data center, Nessel advised them to direct their energy toward DTE, the public service commission, and their local lawmakers, with Irwin saying the Legislature needs to develop better rules to ensure Michigan’s waters and energy consumers are protected from these resource-intensive facilities.

In addition to offering comments at the virtual hearing on Dec. 3, residents can offer comments directly through the Public Service commission’s online docket by looking up the case number, U-21990, and clicking “submit comment” or by emailing them to [email protected].

READ MORE: Whitmer says multi-billion-dollar Saline Township data center is ‘largest investment in Michigan history’

This coverage was republished from Michigan Advance pursuant to a Creative Commons license.