Michigan Public Service Commission Rejects Attorney General's Challenge to Controversial Data Center Energy Contracts

*LANSING* — The Michigan Public Service Commission has rejected Attorney General Dana Nessel's efforts to review heavily redacted contracts for battery storage facilities tied to a massive data center project in Washtenaw County, raising questions about transparency and ratepayer protections across the state.

The commission unanimously denied Nessel's motion to reopen and petition for rehearing during a Friday morning meeting, providing no explanation for their decision. The Attorney General's office had challenged the approval of six energy storage contracts totaling 1,332 megawatts that support a 1,383-megawatt data center being developed by Green Chile Ventures LLC in Saline Township.

"The Michigan Public Service Commission continues to perform a grave disservice to the state of Michigan and the utility customers of this state, to the only apparent benefit of the utility corporations and their new billion-dollar AI customers," Attorney General Nessel said in a statement. "It is my job, by statute, as the state's top consumer advocate, to do my best to protect our state and its ratepayers through the transition."

Redacted Contracts Fuel Concerns Over Transparency

The MPSC approved the contracts on December 18, 2025, but has since denied every request from Nessel's office to examine the heavily redacted documents. The Attorney General argues that without access to the full contracts, consumers cannot verify that adequate protections are in place to prevent existing ratepayers from subsidizing the costs of serving the data center.

In her motion to reopen, Nessel argued that DTE Electric failed to accept conditions the commission had placed on the original approval. She said DTE's response served as a counterproposal offering weaker protection for existing customers.

The commission granted conditional approval requiring DTE to reply by letter within 30 days accepting the conditions, including representations that developers would cover costs to serve the data center without passing expenses to other customers. DTE filed its response on January 15, but rather than making the required representation, altered the language to state "the aggregate revenues generated by the customer will cover the costs to serve them."

"My office will continue to explore our remaining options to protect the people of this state," Nessel said.

Massive Scale: Data Center Storage Capacity Exceeds Natural Gas Plant

The battery storage projects approved today represent the first 332 megawatts of 1,383 megawatts of company-owned energy storage facilities that Green Chile Ventures must develop to match the data center's contracted demand.

According to the commission, the total capacity of the battery storage projects approved for the data center project is greater than the capacity of DTE Electric's 1,150 MW Blue Water Energy Center, the most recent natural gas-fired plant built in Michigan.

The approved contracts include:

  • 450 MW Big Mitten Energy Center in Huron County
  • 350 MW Monroe I Energy Center in Monroe County
  • 200 MW Fermi Energy Center in Monroe County
  • 132 MW Fish Creek Energy Center
  • 100 MW Cold Creek Energy Center
  • 100 MW Pine River Energy Center

The first three projects will provide a combined 1,000 MW of energy storage capacity to fulfill the settlement agreement in DTE Electric's most recent approved integrated resource plan, which identified at least an 850 MW need for energy storage projects to fulfill the company's electric capacity requirements.

Data Center Boom Strains Grid Capacity

Michigan Attorney General Dana Nessel noted during a recent town hall meeting in Howell that 1.4 gigawatts is the equivalent of adding one million homes to the electrical grid overnight. The state, which has approximately 10 million people, faces unprecedented demand as data center proposals come in at a record pace.

"Demand is outstripping supply, and investors are rushing," Nessel said at the Howell town hall. "It is my job, by statute, as the state's top consumer advocate, to do my best to protect our state and its ratepayers through the transition."

Nessel told residents that if data centers go over budget, consumers ought to know about it. She warned that if rates double, triple, or quadruple in the next few years, consumers deserve advance notice.

Consumer Advocates Express Concern Over Process

During the Howell town hall meeting, Nessel acknowledged that not all companies are transparent with their agreements. She said some documents are heavily redacted and that data centers are "not well monitored at all." These companies operate "on the honor system," she said.

While the state already has over 70 data centers operating statewide, Nessel noted that most are not being used for artificial intelligence because they are powering other systems and do not have the capacity for AI operations.

"These companies promise to generate tax revenue that can be used to support local schools or other public works, but they'll only pay those taxes in the event that they're actually turning a profit," Nessel told the Howell crowd.

Technical Benefits vs. Consumer Protections

The Michigan Public Service Commission noted that energy storage provides multiple benefits to the grid by storing excess energy when production costs are low and releasing it during peak demand periods. The commission stated that energy from renewable sources paired with energy storage is significantly cheaper than power produced from coal or natural gas, which should reduce costs for customers.

Battery energy storage helps ensure grid resilience and speeds up the transition to cleaner sources of electricity. The MPSC approved the contracts to improve grid reliability as the energy transition accelerates.

However, the Attorney General's office maintains that the process was too secretive and rushed, and that the commission has shut out her office and other consumer advocates since the contracts were first filed in October.

What Comes Next

The MPSC denied petitions for a rehearing from the Michigan Attorney General and environmental groups, including the Sierra Club and the Natural Resources Defense Council. The commission found that the petitioners lacked standing and failed to provide new evidence or identify errors in the original proceedings.

The commission has repeatedly denied every request from the Attorney General's Office to review the heavily redacted contracts, verify DTE's claims of affordability benefits, and verify adequate ratepayer protections like collateral and exit fee terms.

Nessel said her office will continue to explore remaining options to protect Michigan residents from what she describes as a flawed process that benefits utility corporations and their billion-dollar AI customers at the expense of existing ratepayers.

The data center project in Saline Township will proceed with the approved energy storage contracts, which represent the first phase of the 1,383 megawatts needed to match the data center's contracted demand. Green Chile Ventures is responsible for the costs of developing the energy storage over a 15-year period, while DTE Electric will develop, own and operate the facilities.

Related Stories

This story follows a broader pattern of controversy surrounding data center development across Michigan. The MPSC's approval of these contracts comes amid growing concerns from communities about the environmental and economic impacts of massive data center projects, as well as questions about whether existing ratepayers will bear the costs of serving these facilities.

The commission's decision to reject Nessel's challenge marks another milestone in an ongoing legal battle over how to balance the state's push for artificial intelligence infrastructure with consumer protections and transparency requirements.

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