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LANSING – Michigan Attorney General Dana Nessel filed a motion before the Michigan Public Service Commission to reopen the matter of DTE’s application for approval of two special contracts (PDF) to service an anticipated hyperscale AI data center in Saline Township, citing DTE’s failure to fully agree to conditions meant to protect its customers from subsidizing the costs to service the data center. The Attorney General asserts the matter must be reopened and subjected to a contested case proceeding because DTE failed to accept the Commission’s conditions; that DTE’s response does not reflect the requirements of the Commission’s order and instead serves as a counterproposal, offering weaker protection for existing DTE customers. Attorney General Nessel .
In granting conditional approval to the two contracts, the Commission ordered (PDF) DTE to reply by letter within 30 days of the December 18th order accepting the conditions imposed by the Commission. Among other terms, the Commission ordered that DTE must make representations that “payments made by Green Chile Ventures LLC under Rate Schedule D11 and the special contracts will cover the costs to serve Green Chile Ventures LLC such that the costs of serving Green Chile Ventures LLC (including generation, transmission, distribution, or other costs) are not covered by other customers.”
DTE replied to the order with a letter filed January 15th (PDF). Rather than making a representation to the satisfaction of the order, DTE alters the conditional language, representing that “the aggregate revenues generated by the customer [Green Chile Ventures LLC] will cover the costs to serve them.” This alteration in language, the Attorney General cautions, may permit DTE to force upon their existing customers near-term cost subsidization of the data center, and that DTE has only represented that by the end of the 19-year contract it expects the aggregate payments from the data center to have eventually risen to a sum greater than the company’s own costs to serve the data center. This less-stringent language fails to meet the Commission’s intention to secure a mere representation from DTE that its existing customers will not fund DTE’s costs associated with serving the data center. For this reason, the Attorney General argues, DTE has failed to accept the conditions ordered by the Commission, and thus the Commission should order the matter of contract approval to a contested case proceeding.
“The Commission ordered a mere written representation from DTE that its existing customers would not subsidize the costs to serve this massive data center, and DTE failed to even meet that low bar,” said Attorney General Nessel. “Because DTE did not accept the conditions as ordered by the Commission, by the Commission’s own order this should proceed to a contested case proceeding, as I have long advocated for. These contracts are simply too consequential for the future of energy affordability in Michigan to keep granting fast-track secret review and approvals to untrustworthy partners like DTE, Oracle, and OpenAI.”
The Attorney General has additionally filed in the same case a notice of intervention and request for a contested case (PDF) concerning six new, heavily redacted, contracts proposed by DTE for three battery storage facilities throughout the state meant to support the data center project. In her motion and request, the Attorney General points out that DTE’s application “fails to present any information as to the cost of the contracts in part or in total,” and argues that DTE has not established a basis upon which the Commission may grant ex parte approval.
On January 8th, Attorney General Nessel filed a petition for rehearing in the same data center contract case, challenging the statutory authority of the Commission to approve these special contracts without a contested case hearing and requesting a rehearing in this matter. The Attorney General additionally seeks clarification regarding the extent of the conditions ordered by the Commission and their enforceability, as many of the conditions purportedly put in place by the Commission appear to require only repeated assurances from DTE with no further evidentiary support or commitment, rather than enforceable conditions imposing meaningful requirements on the utility or its customer.
By these measures, the Attorney General continues to seek a contested case hearing in order to:
- review the heavily redacted special contracts,
- verify DTE’s claims of affordability benefits to its ratepayers and that servicing this customer will cause no increase in electric rates for their existing customers, and
- verify adequate ratepayer protections such as collateral and exit fees in place to protect DTE and its customers if the data center fails to purchase the full projected amount of electricity, leaves the state before the full length of the contracts runs, or goes bankrupt.
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