Michigan’s Public Service Commission Grapples with AI Data Center Load

This year, the Michigan Public Service Commission (PSC) is deciding who will foot the bill for energy-hungry AI data centers and how Michigan’s largest utilities, DTE Electric and Consumers Energy, will power data centers and still comply with Michigan’s renewable energy standards.

At the same time, DTE has been negotiating separate deals to serve AI data centers for Oracle and Google, with potentially another deal inked by the end of the year. Even as hundreds of people have been packing local meetings to oppose data centers, the PSC fast-tracked approval of DTE’s deal for Oracle’s 1.4 GW data center, equivalent to nearly the entire electricity consumption of Detroit. The PSC did so without allowing meaningful public participation in the proceeding, denying intervenors the opportunity to scrutinize the contracts through a hearing or submit testimony opposing approval.

Earthjustice is challenging that approval and advocating for ratepayers in six additional cases before the PSC, representing Sierra Club as intervenors in coalition with Michigan Environmental Council and the Natural Resources Defense Council. The decisions being made now – about where AI data centers are built, how they are powered, and who bears the costs and risks – will shape Michigan’s energy future for decades.

These cases will determine whether DTE and Consumers will protect their customers from rising costs associated with data centers and how they will meet the state’s Renewable Energy Standards set by Public Act 235, which requires electricity providers to achieve a portfolio of 50% renewable energy by 2030 and 60% by 2035. The decisions being made now – about where AI data centers are built, how they are powered, and who bears the costs and risks – will shape Michigan’s energy future for decades.

2026 represents a critical year for keeping Michigan utilities accountable in the face of AI data center demand. Michiganders are rising to the occasion to make sure concerns about AI data center growth are made clear to the utilities and regulators, both in PSC proceedings (including submitting nearly 6,300 case comments on the Oracle docket) and in the approval process before local townships.

What are these cases?

• Large load tariff proceedings establish minimum terms for utility contracts with AI data center customers. This can help prevent speculative requests for electric service and reduce the risk that households and other customers will be saddled with billions of dollars of stranded costs if the AI data center exits before it has paid the full cost of the infrastructure built to serve it.
• General rate proceedings are how utilities request increases to your bills. Rate proceedings set the rules for how the utilities will allocate costs to AI data centers, residential customers, and other customer classes.
• Integrated Resource Plan (IRP) proceedings are where utilities lay out how they intend to meet rising electricity demand over the next 5 – 15 years. The IRP determines whether utilities will plan for clean energy (which is often faster and cheaper to build) or whether the PSC will allow utilities to plan for new gas plants, which can take 30 years to pay off.

Together, these cases can provide protections from the potential harms of AI data center load growth. The PSC can protect residential and small business ratepayers and prevent threats to the environment and the grid if the PSC enacts the safeguards that Earthjustice and its clients and partners have and will continue to advocate for. Data centers must not undermine public health, the environment, and an affordable, clean electricity grid.

Current and upcoming cases before the Michigan PSC

1. Michigan PSC Docket No. U-21990 – DTE’s application for ex parte approval of Special Contracts with an Oracle subsidiary for a 1.4 GW AI data center in Saline Township, which the PSC approved in December 2025. Earthjustice appealed the PSC’s decision to grant ex parte approval in the Michigan Court of Appeals on April 16, 2026 and filed its initial brief in support of the appeal on August 6, 2026.
2. Michigan PSC Docket No. U-22058 – DTE’s application for approval of Special Contracts with Google for a 1.0 GW data center in Van Buren Township. Earthjustice filed its Initial and Rebuttal Briefs on July 20 and August 3, 2026 requesting additional safeguards to ensure that the Special Contracts do not negatively impact other ratepayers and that DTE will meet its upcoming Renewable Energy Standards requirements.
3. Michigan PSC Docket No. U-22061 – DTE’s application for approval of a large load tariff that would apply to future customers requesting service over 100 MW, which would include most AI data centers. Earthjustice filed its expert’s Initial Testimony advocating for stronger ratepayer provisions on collateral, termination, and minimum billing requirements on August 4, 2026.
4. Michigan PSC Docket No. U-22046 – DTE’s general rate case where cost allocation for large loads such as AI data centers will be scrutinized.
5. Michigan PSC Docket No. U-22070 – Consumers’ general rate case where cost allocation for large loads such as AI data centers will be scrutinized.
6. DTE’s IRP application (expected filing September 2026) where the generation and renewable energy resources to serve its projected AI data center load will be evaluated and selected, and the estimated total cost impact of AI data center load on the electric system will be assessed.
7. Consumers’ IRP application (expected filing September 2026) where the generation and renewable energy resources to serve its projected AI data center load will be evaluated and selected, and the estimated total cost impact of AI data center load on the electric system will be assessed.

Michigan is at a crossroads with surging demand for energy from AI data centers threatening the progress we have made toward a future powered by clean, renewable energy, while at the same time raising Michiganders’ electricity bills. The outcome of each of these cases before the PSC this year will be crucial for protecting ratepayers and the environment.

Our work in 2026 is a continuation of Earthjustice’s advocacy before the Michigan PSC for over a decade, where our attorneys have fought for the retirement of DTE and Consumers’ coal plants, helped expand energy efficiency programs, and accelerated the build-out of renewable energy and battery storage.

Earthjustice, with its clients and partners in Michigan, will continue advocating to help ensure safeguards and best practices are put in place in each of the seven proceedings to protect ratepayers and Michigan’s clean energy future. We need to make sure that data centers not only pay for their own power, but that they don’t lock us into decades of polluting fossil fuels. Utilities should look to clean power, which is faster and cheaper than constructing new gas plants, and won’t pollute our air and destroy our climate. Help us hold data centers and utilities accountable. We cannot let tech billionaires and our monopoly utilities derail Michigan’s leadership on clean energy.