DTE Plans Two New Large Fossil Fuel Plants to Power AI Data Centers

Detroit, MI —

Yesterday, DTE filed its Integrated Resource Plan (IRP), which shows how the utility plans to generate power over the next 20 years, subject to Michigan Public Service Commission (MPSC) approval. On a positive note, the plan maintains DTE’s commitment to retire the Monroe coal plant and go coal-free by 2032, and includes significant amounts of new renewables and storage. However, the plan also includes a troubling proposal to lock in new fossil fuel resources for decades to come. In particular, DTE requests to build a combined 2.1 GW of gas plants in 2031 and 2032, which is a more than two-fold increase from what DTE projected in an IRP four years ago. In the last year, DTE contracted with Google and Oracle to provide a combined 2.4 GW of power to new artificial intelligence (AI) data centers — enough to power more than one million homes.

“DTE courted Big Tech companies, and now DTE wants to build them new, expensive fossil fuel resources that could harm Michiganders’ water and environment. Further, DTE’s approach to the question of “who pays” is unclear, convoluted, and does not ensure that ordinary ratepayers won’t foot the bill for these new, energy-hogging neighbors. The Michigan Public Service Commission must act to protect ratepayers, and ensure that any new infrastructure built for data centers is paid for by those data centers,” said Helen Li, senior attorney at Earthjustice. 

“Over the next year, we look forward to using our organizing power and expertise to ensure DTE and the MPSC engage in open discussion and find the best way forward for our environment and Michigan ratepayers. During DTE’s last Integrated Resource Plan (IRP) process in 2022, Sierra Club and its partners pushed hard to secure a settlement that included a commitment to fully retire DTE’s coal-fired plant in Monroe by 2032 and increase its renewable energy builds. We will continue to strongly advocate for energy solutions that don’t harm the health or pocketbooks of Michigan ratepayers, particularly as data centers threaten to upend energy demand in our state,” said Elena Saxonhouse, managing attorney for Sierra Club Environmental Law Program.

“We cannot let the demand of Big Tech and AI data centers derail Michigan’s progress toward cheaper, cleaner renewable energy. The IRP filed today relies heavily on new fossil fuels, including two new gas plants with a combined capacity comparable to the enormous new demand from data centers in DTE’s service area. That raises serious questions about how much is being built to serve those companies, and whether DTE’s plan would socialize some of the costs and risks across the rest of us. Over the next year, we will demand more transparency and provide detailed feedback to the MPSC to make sure Michiganders are not on the hook for data center costs,” said Bryan Smigielski, Sierra Club Energy Organizer.

More about DTE’s IRP

DTE estimates that the new power plants will cost a combined $6.443 billion to build — with no clear plan yet for who will pay.

Michigan’s climate law requires 80% of its energy to come from “clean” energy in 2035 through 2039 and 100% in 2040 and each year thereafter. DTE plans to meet Michigan’s climate law requirements while building out new fossil fuel infrastructure in part by employing carbon capture, utilization and storage (CCS). However, DTE does not plan to install CCS on its gas plants until 2035 and has punted into the future how it will demonstrate that the chosen CCS technology will actually lead to the carbon dioxide reductions required by Michigan’s climate law; and Michigan’s climate law requires 80% of its energy to come from “clean” energy in 2035 through 2039 and 100% in 2040 and each year thereafter. DTE plans to meet Michigan’s climate law requirements while building out new fossil fuel infrastructure in part by employing carbon capture, utilization and storage (CCS).  However, DTE does not plan to install CCS on its gas plants until 2035 and has punted into the future how it will demonstrate that the chosen CCS technology will actually lead to the carbon dioxide reductions required by Michigan’s climate law; and how much the technology will ultimately cost ratepayers.

Furthermore, CCS is not a replacement for renewables and storage — it does not fully address emissions or toxic pollutants from gas plants, meaning local communities still bear the negative impacts.

Ample evidence shows that building new fossil fuel infrastructure to power data centers drives up utility rates for ratepayers, while renewable energy paired with storage is far cheaper and far less polluting for host communities.