What did the commission approve?
On October 1, 2026, the Michigan Public Service Commission gave conditional approval to two contracts between DTE Electric and Google for an AI data center in Van Buren Township. The commission is the state agency that sets what Michigan utilities charge and on what terms. The first contract sets the terms of Google’s electric service. The second has Google pay for up to 1,600 megawatts of renewable energy and 480 megawatts of battery storage that DTE will build and own. MPSC release
Both are special contracts, which are deals whose terms differ from the standard price list DTE uses for its other large customers. An earlier DTE deal for an Oracle AI data center in Saline Township was approved without a hearing. This one went through a contested case, a full trial-style proceeding where the attorney general and other groups could demand documents and question DTE’s witnesses. Planet Detroit
The approval is not final yet. DTE has until October 31, 2026, which is 30 days after the order, to file a letter accepting every condition. MPSC issue brief
What Google pays even if it uses less power
Google commits for 20 years, where DTE’s standard large customer rate asks for five. Google must also pay for at least 80 percent of its contracted power every month, whether it uses that much or not. The standard rate sets that floor at 50 percent of contracted capacity or 65 percent of peak use. Commission order, MPSC release
The attorney general asked the commission to raise the floor to 90 percent. Attorney General The commission refused. Its staff tested a case where Google never pays more than the 80 percent floor. Even then, Google’s bills covered the cost of delivering power to the site in every year of the contract. The lowest year was 2035, at 116.64 percent of those costs. Commission order
Who pays if Google leaves early
If Google ends the deal before the 15th anniversary of reaching full load, it owes a termination payment. That is a lump sum equal to its monthly minimum charge multiplied by the months left to that 15 year mark or 24 months, whichever is greater. At full load, which DTE expects by December 2028, the payment comes to about $2.5 billion. MLive
Collateral backs that promise. Here the collateral is a guarantee from Google’s parent company, Alphabet, which becomes a bank letter of credit if Alphabet’s credit rating drops. The commission ruled that DTE alone carries any loss if that collateral falls short. Costs the commission finds were caused by serving Google can never be charged to other customers, even after the contracts end. Commission order
The contract also lets the commission order Google to repay DTE at any point during the 20 years if serving Google costs more than Google pays. The commission will judge that over the whole contract, not year by year. That choice matters. DTE’s own modeling shows other customers paying more from 2035 through 2038, due to the cost of a stand-in gas plant used in the model.
What the commission changed in the deal
The commission ruled that the renewable and storage figures are targets to reach, because up to could otherwise mean as little as 1 megawatt. It also struck the $50 million limit on what Google pays for local wiring upgrades to its site. Without that change, upgrade costs above $50 million would have been weighed under the contract’s cost backstop. Commission order
| Term | As DTE filed it | After the order |
|---|---|---|
| Renewable energy and storage | Up to 1,600 and 480 megawatts | Minimums to reach or beat |
| Google’s share of wiring upgrades | Capped at $50 million | No cap |
| Fee for donated capacity credits | Kept by DTE as profit | Ordinary income that benefits all ratepayers |
| Collateral shortfall | A promise in DTE’s testimony | A binding condition of approval |
The fee in that third row needs a word of explanation. Google will hand DTE 300 megawatts of capacity credits at no cost through May 2033. Capacity credits are what a utility shows the regional grid operator to prove it has enough power to serve its customers. Google also pays DTE an extra fee for the transfer. DTE wanted to keep that fee as profit for its shareholders. The commission said no and sent the money to DTE’s ratepayers instead.
Tomorrow’s topic
The Pennsylvania PUC’s proposed rule on curtailing AI data center power in emergencies.