Michigan Approves DTE-Google Data Center Deal With Protections for Utility Customers

The Michigan Public Service Commission on Oct. 1 approved special electricity supply contracts between DTE Electric and Google for a data center planned in Van Buren Township, Wayne County, with provisions intended to ensure that other utility customers do not bear costs or financial risks associated with the project.

The contracts include a 20-year primary electricity supply agreement and a separate arrangement requiring Google to fund new clean energy resources and battery storage. Under the clean energy agreement, DTE Electric will develop, own and operate up to 1,600 megawatts of renewable generation and 480 megawatts of battery storage to support the data center. The facility is expected to begin receiving electricity in December 2027 and reach its maximum load by December 2028.

The approved electricity contract includes several protections beyond DTE Electric’s standard large load tariff. Google will be subject to a minimum billing demand of 80 percent of its contracted electricity use, compared with 50 percent to 65 percent under the utility’s general large load rate. The agreement also requires an early termination payment equivalent to at least 15 years of minimum monthly charges, along with credit and collateral requirements designed to protect DTE Electric if the facility closes earlier than planned.

DTE Electric estimates that the arrangement could provide a $1.7 billion benefit over the contract’s 20-year term by having Google cover fixed costs associated with resources that can also support the broader electricity system. The commission’s review focused on the financial and service terms of the contracts rather than the data center’s location or development.

The approval follows a contested regulatory review involving the commission staff, the Michigan Department of Attorney General and environmental and energy-sector groups. The proceeding examined the contracts and associated costs, including confidential materials submitted during the review.

The decision comes as large data center developments increase electricity demand and raise questions about how utilities should allocate the cost of new generation, storage and grid infrastructure.