Gretchen Whitmer urges speed, critics want slowdown on Michigan data center

State utility regulators are weighing whether to approve a key power contract for Michigan’s first hyperscale data center
On Wednesday, project backers urged swift approval while critics pled for a lengthier review
A key point of debate: Whether the proposed contract protects ratepayers from subsidizing the energy-hungry facility’s power demand

As Gov. Gretchen Whitmer warned state regulators that “time is of the essence” to land a proposed Saline Township data center that needs their approval to move forward, other Michiganders lined up Wednesday night to urge those same regulators to slow down.

“If their entire business case collapses under the timelines needed to holistically plan, engage with formal public scrutiny and factor in risks, then its entire business model does not work in Michigan,” said Bryan Smigielski, a Michigan organizer with the Sierra Club.

The starkly different messages highlighted the high stakes as the Michigan Public Service Commission — a three-person regulatory body whose members are Whitmer appointees — weighs DTE Energy’s proposal to provide Michigan’s first planned hyperscale data center with enough electricity to power a million homes.

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DTE officials have requested commissioners’ swift approval of a proposed 19-year contract to power the planned Saline Township facility, which would be jointly operated by Oracle, OpenAI and Related Digital.

Commissioners could rule as soon as Friday on the request or opt to open a so-called contested case, a lengthy review process that involves discovery, cross-examinations and formal hearings before a decision.

DTE officials contend thorough public vetting is unnecessary because the contract will not raise customers’ rates. They have warned that without swift approval, developers may cancel the $7 billion project.

That argument got a boost Wednesday from Whitmer, who supports the project and wrote in a letter to the commission that, “if we do not act, it will cost us thousands of jobs and billions of dollars of investment in our economy.”

Whitmer stopped short of expressing support for ex parte approval, but warned that other states are racing to land “similar projects with far less oversight.”

Business and trade union representatives also urged commissioners to approve the proposed contract.

A host of other parties, including Michigan Attorney General Dana Nessel, multiple environmental groups and dozens of lawmakers, have urged the MPSC to open a contested case, arguing a development that would add an unprecedented amount of new demand on Michigan’s electrical grid deserves thorough public vetting.

“Fast-tracking a project of this size while side-stepping the formal process is reckless and sets a horrible precedent,” said Sen. Sue Shink, D-Northfield Township, who was among nearly two dozen Democratic legislators to sign a joint letter Wednesday calling for a contested case.

An artist's rendering of a proposed data center — A trio of tech companies wants to transform farmland in southwest Washtenaw County into Michigan’s first hyperscale data center. (Courtesy of Related Digital)

Commissioners did not say Wednesday how they’ll vote on the proposed contract, but sought to assure onlookers that they’re taking the review seriously.

“My fellow commissioners and I are looking to ensure that the protections envisioned by the contract are strong enough to ensure that Michigan’s customers don’t foot the bill for any cost incurred by data centers,” Commissioner Katherine Peretick said.

Deliberation over the contract comes at a pivotal moment for Michigan, where tech companies are racing to secure land and energy access to build data centers that are newly eligible for tax exemptions worth millions of dollars annually for a single facility.

Developers have publicly floated no fewer than 12 data center proposals in recent months in the rural outskirts of places like Monroe, Milan, Lowell and Howell as they race against one another to occupy limited excess capacity on Michigan’s energy grid.

The flurry of activity has prompted furious debate, with proponents welcoming the potential for new tax revenue and business investment while opponents condemn developers’ secretive negotiating tactics and express concerns about the facilities’ environmental impacts.

Depending how they’re built, data centers can use vast quantities of water or relatively little.

But all hyperscale data centers demand copious amounts of energy (the Saline Township facility would gobble up as much as a million homes), and utilities have often kept up by burning more of the fossil fuels that are dangerously warming the planet.

Meeting the facilities’ power demand often requires major new investments in the energy grid, prompting concerns about who will pay for the poles, wires, batteries and power plants needed to serve the industry.

Michigan law requires data center developers to pick up those costs in order to receive tax breaks, and DTE officials contend their proposed contract is in compliance. But the only publicly available version of the document is heavily redacted.

“If somebody is trying to race through the process with closed doors … there’s probably a reason,” said Washtenaw County resident Rachel Brown, one of dozens of commenters who urged commissioners to conduct a deeper review.

Under the proposed 19-year contract with an Oracle subsidiary called Green Chili Ventures LLC, the 1.4-gigawatt facility would be required to pay for at least 80% of its contracted power even if it uses less and would be required to pay for at least 10 years of service even if it closes early. Data center developers would also cover the cost to build 1.4 gigawatts of battery storage to help power the facility.

Commissioners are tasked with approving the contracts if they find that they’re reasonable and in the public interest, said Mike Byrnes, the commission’s chief operating officer.

“It’s important to note that a utility can’t refuse to provide service to a customer who wants service and is willing to comply with approved terms and conditions of service, and the commission can’t direct the utility not to provide service to such a customer,” he said.