AG Nessel Briefs Appeal Over MPSC Approval of DTE’s Saline Data Center Contracts

LANSING – Yesterday, Michigan Attorney General Dana Nessel filed a brief in support of her appeal (PDF) in the Michigan Court of Appeals challenging the Michigan Public Service Commission’s “conditional approval” of two special contracts to service a 1.4 gigawatt hyperscale AI data center in Washtenaw County. The Commission approved those contracts under ex parte consideration, denying the Attorney General’s request to hold a contested case over the contracts, relying on a critically flawed interpretation of a narrow exemption afforded under MCL 460.6a(3). The Attorney General seeks to invalidate the Commission’s unlawful approval of these contracts between DTE and Green Chile Ventures, LLC and remand the matter back before the Commission for the commencement of a contested case hearing.

The Attorney General argues in her brief that the MPSC:

• Acted arbitrarily and capriciously in approving the special contracts in several ways, including by failing to identify evidence on which the MPSC based its findings;
• Erred in accepting DTE’s blatant alteration of essential cost coverage conditions meant to keep residential utility customers from paying costs to service the data center;
• Acted unlawfully when they approved the data center contracts under an ex parte process, in part because DTE’s own filings openly admit the agreement will cause a cost-of-service increase for certain customers;
• Ignored its own recently developed standards for evaluating data center contracts; and
• Ignored facts and issues concerning DTE’s omission of transmission investment costs of providing power to the data center.

“It is essential we hold the Commission accountable to the law,” said Attorney General Nessel. “Not only to protect Michigan residents and utility customers from the worst hazards posed by these DTE contracts, but to ensure every proposed massive data center contract in the future is thoroughly and fairly scrutinized. It is my hope the Court will order the MPSC to hold a full contested case over these still-secret, and likely damaging, contracts.”

Attorney General Nessel announced this appeal, over the MPSC’s orders in case U-21990, in April of this year. The MPSC has repeatedly denied every request from the Attorney General to hold a contested case hearing in this matter, which would allow her office and other consumer and environmental advocacy organizations to:

• Review the still heavily redacted special contracts,
• Verify DTE’s unproven claims that servicing this customer will not cause an increase in electric rates for its existing customers, and
• Verify adequate ratepayer protections such as collateral and exit fee terms to protect DTE and its customers if the data center fails to purchase the full projected amount of electricity, leaves the state before the full length of the contracts runs, or goes bankrupt.

The Attorney General’s brief filed yesterday reads, in part,:

“Despite the enormity of this project, DTE’s application omitted or glossed over several categories of investment costs, declined to provide modelling as normally used to evaluate large investment proposals, and presented extensively redacted contracts for which key terms were left undisclosed and unexplained.  DTE sought fast-tracked approval by deadlines unconfirmable from redacted sections of the contracts. What’s more, it insisted that no other interested parties—namely the Attorney General as the State’s utility ratepayer advocate—should have the opportunity to review further or even ask questions to ensure against cost increases for Michiganders, deviating from the Commission’s default review procedures.

"The Michigan Public Service Commission bypassed this parade of red flags and granted approval of DTE’s application without opportunity for review in a contested proceeding.  Its approval orders in turn present a litany of errors in evaluating both law and fact.  The orders ignore uncontroverted evidence that DTE’s requested relief entailed the projection of a rate increase for at least one category of customer.  The orders also apply a mistaken interpretation of the statutory standard for evaluating ex parte relief, and the Commission has previously denied ex parte relief for an analogous, and less cost-intensive, utility request for investment approval.”

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