Michigan Regulators Approve Landmark 19-Year Power Deal for Massive AI Data Center
December 18, 2025
In a pivotal decision for the state's economic and technological future, Michigan regulators have conditionally approved long-term power contracts for a colossal artificial intelligence data center project near Ann Arbor. The move underscores the intense competition among states to attract capital-intensive AI infrastructure, which promises significant job creation but also raises profound questions about energy consumption, environmental impact, and regulatory transparency.
The Michigan Public Service Commission (PSC) voted unanimously on Thursday to authorize DTE Electric Co.'s 19-year power supply and 15-year energy storage agreements with Green Chile Ventures LLC, a subsidiary of Oracle Corp. that plans to serve OpenAI. The approval, granted via an expedited "ex parte" process less than two months after the utility's request, clears a major hurdle for the multi-billion-dollar "Stargate" facility planned in Saline Township. The hyperscale data center, with a staggering power demand of 1.4 gigawatts, would become Michigan's single largest electricity user upon completion. Its consumption is equivalent to powering approximately one million homes and would increase DTE's average daily load by 23% to 28%.
The project's developer, Related Digital, aims to commence construction in the first quarter of 2026, pending environmental permits. Governor Gretchen Whitmer hailed the project as "the largest economic project in state history," stating it will create 2,500 union construction jobs, over 450 permanent positions, and more than 1,500 community jobs. "The Stargate project cements our state as the place to pioneer cutting-edge technology and change the world," she said.
However, the commission's decision was met with vocal opposition from some residents and advocacy groups during the meeting in Delta Township. The PSC had received over 5,500 public comments, largely critical of the project or urging more extensive review. Critics, including State Attorney General Dana Nessel, environmental organizations, and a residential ratepayer group, argued the expedited process lacked sufficient transparency and scrutiny of DTE's claims that the deal would benefit its 2.3 million other customers.
Commissioners defended their decision, emphasizing legal obligations and contractual safeguards. Commissioner Katherine Peretick stated the contracts are "well-negotiated" and project a net financial benefit to DTE's other customers of roughly $300 million annually. "That is a real cost savings at a time when affordability is so important," she said. PSC Chair Dan Scripps detailed the commission's review of credit provisions, asserting the contracts include "real protections" for ratepayers even in a worst-case scenario where the projected data center load fails to materialize. DTE has stated it is guaranteed to collect at least $2.3 billion from Green Chile even if no electricity is used.
The approval comes with several conditions for DTE, including filing a new tariff for very large customers within 90 days and incorporating an analysis of renewable energy needs in its long-range planning. The 19-year power supply term is nearly four times the utility's standard five-year agreement for large industrial users and includes options for extension. Under the separate storage agreement, Green Chile will bear all costs for new battery-storage projects to manage the increased peak load.
The project's financial scale is monumental. While the exact investment by Oracle, OpenAI, and Related has not been disclosed, it would need to exceed $7 billion to qualify as Michigan's largest-ever economic development project. Infrastructure costs include $300 million for a new substation and $200 million for transmission upgrades, with Related providing a $40 million advance payment.
The debate in Michigan mirrors a national conversation about the AI infrastructure boom. Oracle confirmed that final equity negotiations for the project are "on schedule," following reports that Blue Owl Capital was no longer involved. As billions flow into data centers, investors and regulators alike are weighing the potential for overcapacity.
Despite the approval, significant opposition remains. Attorney General Nessel expressed "extreme disappointment," criticizing the process for shielding the utility from necessary scrutiny. Saline Township resident Tim Bruon, who lives near the site, called the vote "ridiculous" and raised pollution concerns. In contrast, a spokesperson for Related said the decision unlocks nearly $5 billion in construction work for Michigan companies and gives "confidence to thousands of union construction workers" for in-state projects.
DTE, acknowledging the "range of viewpoints," stated it remains committed to delivering reliable energy. The Stargate project now moves forward, positioning Michigan at the forefront of the AI arms race while setting a precedent for how states manage the enormous energy and community impacts of next-generation computing hubs.
Source: crainsdetroit
