In Michigan, a significant energy debate is underway as regulators evaluate a proposed data center project near Ann Arbor. This initiative, involving tech giants Oracle and OpenAI, has prompted DTE Electric to request expedited approval for special energy contracts necessary to meet the project’s substantial power demands.
DTE Electric has formally requested the Michigan Public Service Commission to fast-track the approval process. The utility company estimates a 25% increase in peak capacity, equating to 1.4 gigawatts, will be essential to support the data center. To put this in perspective, one gigawatt can power approximately 100 million LED bulbs, a substantial amount exceeding the output of a standard nuclear power plant.
This week’s hearing by the Michigan Public Service Commission aims to gather public input on the matter. Some critics argue for a more comprehensive “contested case” review process, allowing industry and advocacy groups to present their evidence and testimonies. This data center is among several planned projects in Michigan aimed at supporting the AI industry’s growth, which has ignited controversy in local communities.
State Representative Morgan Foreman, representing Saline Township, the proposed site for the data center, expressed concerns about the project’s impact on the community. “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 stated.
DTE’s submission to the public service commission assures that the data center will not lead to higher rates for regular 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,” wrote DTE attorney Andrea Hayden.
However, Michigan Attorney General Dana Nessel remains cautious, citing the lack of transparency in DTE’s special contracts. “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 questioned.
Supporters of the data center emphasize that Michigan has policies to prevent such issues. State Representative Joey Andrews, co-sponsor of data center-friendly legislation passed last year, noted that these laws ensure data centers do not pay less than other industrial customers or pass costs to others.
Andrews advocates for the project, highlighting its potential benefits to Michigan and 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 explained.
While Andrews acknowledges the need for public hearings, he also suggests that delays could raise project costs. “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,” he remarked.
Foreman, while recognizing the potential advantages of data centers, warns that the ongoing process might lead to increased opposition to future projects. “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,” she commented.
According to a recent filing by DTE, the company needs contract approval by December 5 to keep the project on track. The commission is expected to hold another meeting on Friday, though the agenda has yet to be announced.
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