Google and OpenAI’s massive Michigan data centers could demand roughly 2.4 gigawatts of electricity—enough to power about 2.8 million average Michigan homes. As regulators try to protect DTE customers from footing the bill, Michigan is confronting a bigger question: Should hyperscale data centers be required to reduce their demands on the electric grid by generating more of their own power?
LANSING — Michigan regulators have approved a 20-year electricity agreement for Google’s massive new data center with protections designed to prevent ordinary DTE Energy customers from paying its costs—a decision that could help establish the rules for Michigan’s rapidly expanding data-center industry.
The ruling takes on added importance because an even larger 1.383-gigawatt Oracle/OpenAI data center is already under construction in Saline Township under an earlier DTE agreement.
Together, Google and Saline could add roughly 2.4 gigawatts of new electricity demand to DTE’s system.
To put that number in perspective, if both facilities operated continuously at maximum demand, that is roughly enough electricity to supply 2.8 million average Michigan homes, based on federal residential electricity-consumption data.
That raises two increasingly important questions:
Who pays for all the new energy infrastructure these projects require—and could data centers reduce their demands on Michigan’s electric grid and water system in the first place?
Google Must Pay At Least 80%
The Michigan Public Service Commission unanimously approved special contracts between Google and DTE running for 20 years.
Google must pay for at least 80% of its contracted electricity demand, even if it uses less.
If Google leaves early, the agreement requires payments ensuring it ultimately pays at least 15 years of minimum monthly charges. Google must also meet credit and collateral requirements designed to protect DTE customers.
The MPSC says those provisions ensure existing customers aren’t left paying costs associated with serving the data center.
DTE estimates Google’s payments could provide approximately $1.7 billion in benefits to other customers over 20 years by helping cover fixed electric-system costs.
Attorney General Dana Nessel wanted stronger protections. Her office sought a 90% minimum billing requirement, stronger termination payments and additional accounting to demonstrate that financial benefits actually reach customers.
Could Google Become The Michigan Model?
Michigan regulators had already begun developing similar protections when they approved DTE’s contracts for Saline in December 2025.
Saline’s agreement includes a 19-year minimum term, 80% minimum billing requirement, early-termination protections and collateral requirements.
The MPSC also required DTE—not other customers—to absorb costs of serving the 1,383-megawatt facility that it cannot recover from the data-center customer.
But there is a major difference.
Saline was approved through an expedited ex parte proceeding. Google went through a full contested case in which MPSC staff, Nessel’s office and outside organizations could examine evidence and challenge DTE’s proposed terms.
Nessel is asking the Michigan Court of Appeals to invalidate the Saline approval and return it to the MPSC for a contested proceeding.
The MPSC has rejected requests to reopen the Saline case, so Google’s agreement does not automatically change Saline’s contracts.
If the Court of Appeals sends the case back, however, regulators could reconsider the agreements—and the Google case could provide an important benchmark.
Meanwhile, Saline is moving forward.
OpenAI says the project is expected to create more than 2,500 union construction jobs and 450 permanent onsite jobs, plus additional employment elsewhere in Washtenaw County.
Saline Offers A Possible Water Solution
Saline also illustrates one potential solution to another major data-center concern: water consumption.
The project is designed around a one-time-fill, closed-loop, non-evaporative liquid-cooling system rather than continually consuming large quantities of water through evaporative cooling.
OpenAI says the cooling system should consume roughly as much water as a typical office building.
If it performs as projected, Saline could demonstrate that enormous AI computing facilities don’t necessarily have to become enormous water consumers.
Could Data Centers Generate Their Own Power?
Electricity presents a harder challenge.
Google’s facility could consume as much as 1 gigawatt. Under a separate agreement, Google will pay for DTE to develop up to 1,600 megawatts of renewable generation and 480 megawatts of battery storage.
But another model is emerging: generating more electricity directly at data-center campuses.
Elon Musk’s xAI has used on-site natural-gas turbines and large battery installations at its massive Colossus AI computing operation in Tennessee.
Colossus isn’t completely off-grid—it normally uses utility electricity. But xAI says its combination of on-site generation and more than 200 Tesla Megapack batteries allows the facility to disconnect from the grid during emergencies or periods of extreme demand.
The approach is controversial. Environmental organizations have challenged xAI’s natural-gas turbines over air pollution and permitting.
But it raises an important Michigan question:
Should hyperscale data centers generate at least part of their own electricity rather than requiring utilities to build enough generation and transmission to supply their entire demand?
Michigan Company Says It Can Be Done
Brighton-based Bratic Energy founder Stevan Bratic previously told MITechNews that on-site generation could supply the full electricity requirements of a hyperscale data center.
“We could offset 100% of the energy used with on-site power generation,” Bratic told MITechNews.
His concept combines technologies including natural-gas generation, renewable energy and battery storage into what effectively becomes a data-center microgrid.
That could reduce the amount of new generation and transmission utilities such as DTE must build.
It wouldn’t eliminate every problem. Natural-gas generation produces emissions and requires fuel infrastructure and environmental permits, and hyperscale facilities would likely retain grid connections for reliability.
But it demonstrates that Michigan has options beyond simply building more centralized power generation.
Michigan Is Writing The Rules Now
Michigan’s data-center debate is therefore moving beyond whether communities should approve these developments.
The bigger question is what Michigan should require from companies demanding extraordinary amounts of electricity, water, land and infrastructure.
Google provides one model: long contracts, minimum payments, exit penalties, collateral and customer-funded energy resources.
Saline provides another potential solution: dramatically reducing cooling-water consumption.
On-site generation and microgrids could provide a third: reducing how much new electricity utilities must generate and transmit.
Those approaches aren’t mutually exclusive.
Michigan could eventually require combinations of all three.
With Saline already moving forward, Google advancing toward construction and additional hyperscale projects being proposed, decisions being made now could determine not only who pays for Michigan’s AI infrastructure boom—but how much new infrastructure needs to be built in the first place.
