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Michigan Attorney General Dana Nessel is urging state utility regulators to reconsider their approval of special power contracts for a massive data center planned in Washtenaw County, warning the fast-tracked decision could leave electric customers exposed to higher costs.
Nessel announced Friday that her office filed a petition for rehearing with the Michigan Public Service Commission over its Dec. 18 decision to conditionally approve two special contracts sought by DTE Energy to serve a proposed 1.4-gigawatt hyperscale artificial intelligence data center in Saline Township.
The project, tied to Oracle, OpenAI, and developer Related Digital, would be among the largest data centers in the country and is expected to consume as much electricity as nearly one million homes. Its scale has caused concerns among residents, environmental advocates, and consumer watchdogs about long-term impacts on electric rates, grid reliability, and the environment.
Nessel’s move also pits her against Gov. Gretchen Whitmer, a fellow Democrat who has publicly backed the data center as “the largest economic project in Michigan history.” Whitmer celebrated the project when it was announced last fall, citing thousands of construction jobs and hundreds of permanent positions.
On Thursday, U.S. Senate candidate Abdul El-Sayed, a progressive Democrat, released what he called “terms of engagement” aimed at protecting communities from higher utility bills, grid strain, and environmental harm tied to data centers.
At least 15 data center projects have been proposed across the state in the past year.
The split among Democrats is part of a broader debate over whether Michigan should keep fast-tracking energy-hungry data center projects tied to the AI boom.
In her petition, Nessel challenges the commission’s authority to approve the contracts behind closed doors without holding a contested case hearing that would allow discovery, sworn testimony, and full public review. She also questions whether the conditions imposed by the commission are meaningful or enforceable.
In a statement Friday, the Michigan Public Service Commission said it “looks forward to considering Nessel’s petition for rehearing,” but the commission “unequivocally rejects any claim that these contracts were inadequately reviewed.”
The commission said its professional staff, advisory staff, and commissioners were provided with unredacted versions of the special contracts and reviewed them thoroughly to ensure existing customers are protected. The commission said its order recognizes DTE’s legal obligation to serve the data center while imposing what it described as the strongest consumer protections for a data center power contract in the country.
The attorney general is seeking clarification on how those conditions would protect ratepayers, noting that many appear to rely on repeated assurances from DTE, rather than concrete commitments backed by evidence. Nessel also objected to the commission allowing DTE to serve as the project’s financial backstop, rather than requiring the data center operator to provide sufficient collateral to cover potential risks.
“I remain extremely disappointed with the Commission’s decision to fast-track DTE’s secret data center contracts without holding a contested case hearing,” Nessel said in a statement. “This was an irresponsible approach that cut corners and shut out the public and their advocates. Granting approval of these contracts ex parte serves only the interests of DTE and the billion-dollar businesses involved, like Oracle, OpenAI, and Related Companies, not the Michigan public the Commission is meant to protect. ”
She said the commission’s approval process served the interests of DTE and the companies behind the project rather than Michigan residents.
“The Commission imposed some conditions on DTE to supposedly hold ratepayers harmless, but these conditions and how they’ll be enforced remain unclear,” Nessel said. “As Michigan’s chief consumer advocate, it is my responsibility to ensure utility customers in this state are adequately protected, especially on a project so massive, so expensive, and so unprecedented.”
Large portions of the contracts remain heavily redacted, preventing outside parties from verifying DTE’s claims that serving the data center will not raise rates for existing customers. Nessel said a contested case is necessary to review the full contracts, assess affordability claims, and confirm that protections, such as collateral requirements and exit fees are in place.
The commission ordered DTE to formally accept its conditions within 30 days of its Dec. 18 order. Nessel said that timeline complicates decisions about whether further legal challenges are necessary, prompting her office to file the rehearing petition in part to preserve its arguments.
The power contracts are one piece of a larger controversy surrounding the Saline Township project referred to as “Project Stargate.” Residents and environmental groups have raised alarms about wetlands destruction, water contamination risks, and the permanent transformation of a rural farming community.
More than 5,000 public comments opposing the data center power deal were submitted to the commission ahead of its December vote. Critics argue the rush to approve the contracts is part of a broader pattern as deep-pocketed utilities and developers seek to capitalize on the AI boom, which is driving a nationwide surge in electricity demand from large-scale data centers.
“As my office continues to review all potential options to defend energy customers in our state, we must demand further clarity on what protections the Commission has put in place and continue to demand a full contested case concerning these still-secret contracts,” Nessel said.
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Steve Neavling
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