Michigan’s attorney general is suggesting tweaks to the proposed utility contracts for a planned Google data center in southeast Michigan.
The contracts would allow DTE Energy to dedicate up to 1.6 gigawatts of renewable energy, and 480 megawatts of electricity storage, to the project in Saline Township in Washtenaw County. That’s a massive power supply the grid can’t currently support.
To get there, the contracts would require Google to pay for the entire cost of any new renewable energy and power storage projects.
A summary of the contracts’ terms show the company would also pay for at least 80% of the maximum amount of energy it could use for the first 15 years the project is fully running. There would also be a termination fee, with the amount depending on whether Google were to walk away before or after those 15 years are up.
While the terms lay out 15 years’ worth of guaranteed payments, the contract runs for 20 years.
Michigan Attorney General Dana Nessel said Google needs to pay more of those potential costs up front, as well as higher fees for an early exit.
“We don’t expect them to become insolvent, but there's a maximum amount that is set in the event that this facility becomes obsolete, or it's no longer profitable,” Nessel said in an interview Friday. “We think it should cover the entirety of the costs, not just a percentage of that cost.”
DTE Energy defended the proposed Public Service Agreement and Clean Capacity Accelerator Agreement as arrangements that would benefit the utilities’ other customers.
“Adding a large, high load customer like this data center, helps spread fixed grid costs across a broader customer base, which is expected to reduce pressure on bills for existing customers – nearly $1.7 billion in positive affordability benefits over the life of the Google contract,” a DTE press release said.
Google declined to comment further Friday, but instead pointed to previous statements made from other organizations in favor of the data center.
Michigan law bans utility companies from passing the costs of supplying power to a data center on to residential customers.
But Nessel worried it might be too far after the fact to fully enforce those provisions should the contracts go through as they are.
“The concern is that all of this energy infrastructure will be built. Then these guys won't want these hyperscale facilities any longer. And the contracts are such that they won't be stuck paying for the entirety of it,” Nessel said.
The matter remains open before the Michigan Public Service Commission, which is currently accepting public comment.
Unlike a previous hyperscale data center project in Saline Township, connected to OpenAI and Oracle, that previously went before the commission, Google and DTE are filing what's known as a contested case.
That leaves more time for hearings and administrative review. Google and DTE are requesting an answer on their application from the board by mid-September.
This past winter, the Public Service Commission approved a contract for the Saline Township project, despite significant pushback, after commissioners said they were satisfied with the companies' concessions.
Tweaks in Google and DTE's request could also come before a project becomes final.
