Michigan OKs DTE 1.4 GW Contract for Stargate AI Campus
- AI Energy Demand Data Centers Grid Capacity Regulatory
Marin Holt
- 0
- 5 minutes read
- Michigan MPSC voted 3-0 on December 18, 2025, approving DTE contracts to supply 1.4 GW to the Stargate AI campus in Saline Township.
- The 19-year agreement requires 80% minimum billing demand and a 10-year termination payment if the facility exits early.
- Oracle and partners must finance approximately $2 billion in battery storage and grid upgrades as a condition of service.
- The data center requires 1,383 MW of battery storage to be built and financed by the operator under a 15-year storage agreement.
- DTE projects up to 8.4 GW in additional data center load inquiries, which would nearly double its current total electric load.
Michigan’s Public Service Commission voted 3-0 on December 18, 2025, to conditionally approve DTE Electric contracts to supply 1.4 GW of power to the Stargate AI data center campus in Saline Township, a 575-acre facility backed by OpenAI, Oracle, and Related Digital with an estimated $7 billion in total investment. The approval includes mandatory ratepayer protections requiring the data center operators to finance nearly $2 billion in battery storage and grid infrastructure.
What Was Approved
The MPSC approved a 19-year power supply agreement between DTE Electric and the Saline Township campus with a minimum billing demand of 80%, higher than the 50-60% standard in DTE’s industrial tariff, and a termination payment equal to up to 10 years of minimum billing demand if the facility exits early. A separate 15-year energy storage agreement requires Oracle and its partners to finance 1,383 MW of battery storage capacity and approximately $2 billion in grid upgrades as a condition of receiving service. DTE will meet the 1.4 GW load increase without building new generation, instead purchasing on open markets and using off-peak hours to charge batteries. The facility’s projected demand exceeds the output of DTE’s Fermi 2 nuclear plant and would increase the utility’s total electric load by 25%. DTE has disclosed a pipeline of up to 8.4 GW in additional data center load inquiries.
Why It Matters
The Saline Township decision establishes the most detailed ratepayer protection framework any state commission has applied to a hyperscale data center contract. The 80% minimum billing demand, $2 billion infrastructure obligation, and 10-year termination payment shift infrastructure costs to the data center operator rather than existing DTE customers, a structure that utility commissions in Indiana, Illinois, and other Midwest states are now studying for their own large-load applications. The deal also sets a precedent for storage obligations: rather than approving grid upgrades and billing existing customers, the MPSC required the data center to pay for and own the storage capacity it needs. If DTE’s 8.4 GW pipeline materializes, Michigan could add more than twice its current generation capacity in data center demand alone, making the Saline Township terms a template with long-term consequences for MISO reliability and Midwest electricity prices.
Critical Perspective
Michigan’s 3-0 approval locks in a 19-year load commitment before the first Stargate server rack is operational. Large hyperscale contracts of this scale historically carry a three-to-seven-year ramp-up period before reaching committed load, meaning ratepayer cost-recovery obligations begin well before the facility delivers its full $7 billion in economic activity. Amazon’s comparable Northern Virginia data center campus experienced four-year delays between regulatory approval and full occupancy due to cascading permitting and construction setbacks. The question the PSC did not answer: who bears the stranded infrastructure cost if AI workload consolidation makes the 1.4 GW Saline Township campus functionally obsolete before its 2044 contract expiry?
