Michigan Regulators Greenlight DTE Energy’s Massive Data Center Plan
The Michigan Public Service Commission (MPSC) has officially approved DTE Energy’s plan for a hyperscale data center in Saline Township. This decision comes despite significant public opposition and concerns regarding the project’s impact on the local electric grid and energy costs.
DTE Energy’s Data Center Agreement Overview
On December 18, 2023, the MPSC voted unanimously (3-0) to endorse DTE Energy’s contract to supply 1.4 gigawatts of energy for the new data center. This facility, backed by Related Digital, Oracle, and OpenAI, is part of the larger “Stargate” initiative, which supports generative AI development. The campus will include three single-story structures covering 550,000 square feet each, situated on a 250-acre site north of U.S.-12.
Public Concerns and Regulatory Process
Opponents of the project raised concerns about its potential to strain Michigan’s electric grid and increase residential energy bills. Regulatory filings indicated that DTE claims the agreement will not burden current energy demands or raise costs for consumers. Under a recent state law enacted in 2024, data centers cannot transfer energy costs to residents to qualify for tax incentives.
The approval process was somewhat controversial, as it bypassed a traditional contested case procedure. This typically would have allowed for public testimony and expert witness contributions, which many community members desired. MPSC Chair Dan Scripps acknowledged public frustration but maintained that the expedited process matched similar past proceedings.
Project Scope and Economic Impact
- Project Timeline: Construction is set to begin in early 2024.
- Job Creation: The project is expected to generate 2,500 construction jobs and 450 permanent jobs once operational.
- Minimum Energy Commitment: DTE will enforce a billing demand of 80% of the energy capacity in the contract.
- Duration: The agreement spans a minimum of 19 years.
Supporters, including Governor Gretchen Whitmer, argue that the new data center is crucial for Michigan’s economic transformation and maintaining competitiveness in the tech sector. However, environmental groups remain concerned about the energy demands and ecological impacts associated with such facilities.
Energy Production and Environmental Considerations
The initial energy requirements for the Saline Township data center are projected to exceed the output of DTE’s Fermi 2 nuclear plant. The development also raises questions about water consumption, as large data centers typically require significant amounts of water for cooling purposes. Although developers plan to implement a closed-loop water system, some experts suggest that this method may be less efficient than other cooling systems.
Furthermore, the demand for energy from hyperscale data centers poses challenges to Michigan’s clean energy goals. Under legislation enacted in 2023, the state aims for all energy production to be derived from clean sources by 2040, though provisions exist for exemptions.
Future Developments and Community Response
The MPSC has mandated DTE provide annual reports on the data center’s impact on its energy portfolio. As the hyperscale data center landscape evolves in Michigan, public sentiment has proven a decisive factor. While plans succeed in some areas, such as Saline Township, other proposals have failed due to community opposition, including recent rejections in Howell and Kalkaska.
The actions surrounding DTE Energy’s data center plan highlight the complexities of balancing technological advancement with public interest and environmental sustainability in Michigan.
