Nessel calls DTE rate pause proposal a ‘ransom note’

One of the state’s largest energy companies has promised not to seek additional rate increases for at least two years after its most recent request is settled later this year. 

DTE Energy, which supplies power to 2.3 million customers in southeast Michigan, announced on Thursday that the $474.3 million request it plans to file on April 28 would be its last for some time, provided that a 1.4-gigawatt data center contracted with the energy company continues to move forward.

“Now more than ever, we know affordability matters to our customers – and we’re doing everything we can to keep energy bills as low as possible while also providing the reliable power they need,” Joi Harris, DTE’s president and CEO, said in a statement. “As long as the first data center project we’re supporting comes online as planned by the end of 2027 and we’re able to receive other regulatory approvals, we will refrain from filing another rate request until at least 2028 – providing customers two years without an increase in rates after the current request is complete.”

The data center in question is the controversial Saline Township project under development by Oracle, OpenAI and Related Digital. In December, state energy regulators offered their conditional approval to contracts between DTE and Green Chile Ventures – an oracle subsidiary – to supply power to the facility. 

Michigan’s energy utilities have long been criticized for poor reliability and high rates, with the Citizens Utility Board of Michigan reporting households pay more for energy here than in any other Midwest state.

DTE has faced particular scrutiny from lawmakers and Michigan’s attorney general after filing an electrical rate announcement with the Michigan Public Service Commission days after the commission approved a $242.2 million electric rate increase.

In a statement to Michigan Advance, Attorney General Dana Nessel said the company is finally reckoning with the frustration of Michigan households struggling to pay their energy bills. However, the attorney general remained skeptical of the proposal.

“I think every business and household would welcome a break from their constant and ever-growing rate hikes, but DTE only offers to skip their next rate hike after approval of their current rate hike case, their largest this decade,” Nessel said. “DTE only offers a break in rate hikes if they win some other, unnamed data center approvals, and their Saline data center comes online with no delay. This isn’t a commitment, it’s a ransom note.”

The company argued that when a large customer like a data center is brought onto the energy grid, fixed costs can be spread more widely, benefiting all other customers. 

Nessel said these affordability benefits have never been proven, noting that her office has appealed the decision to approve the Saline Township data center contracts in hopes of forcing a contested case and allowing her office and other consumer advocacy groups to review the contracts and submit testimony to the public service commission. 

The Michigan League of Conservation Voters also viewed the announcement with skepticism, with Alex Kellogg, the group’s energy accountability manager, arguing the proposal is no more than smoke and mirrors stemming from public pressure against the company.

“Michiganders are not going to be held hostage by DTE for a data center nobody wants because it was approved the wrong way – jammed down our throats with non-disclosure agreements, a fast-tracked ‘rocket docket,’ and contracts so redacted they looked like swiss cheese,” Kellogg said in a statement.