Nessel and environmental groups file initial arguments in appeal of DTE Saline data center contract

Michigan Attorney General Dana Nessel, alongside several environmental advocacy groups, is continuing to push for scrutiny as they demand the Michigan Court of Appeals overturn a set of energy contracts for a controversial data center in Saline Township. 

On Friday, Nessel announced she had filed a brief challenging the Michigan Public Service Commission’s decision to grant conditional approval to two contracts permitting DTE Energy to provide 1.4 gigawatts of energy to the Stargate data center under development by OpenAI, Oracle and Related Digital.

Since the contracts first came under the regulatory body’s consideration, Nessel has lobbied for a contested case proceeding, which would allow her office and other interested parties to examine the contracts and file testimony with the commission. However, the commission gave the contracts ex parte approval, advancing the contracts without outside input. 

In her appeal, the attorney general aims to invalidate the contracts’ approval and have the matter placed back before the commission as a contested case, arguing the commission failed to make several key considerations when reviewing the contracts.

“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,” Nessel’s brief reads. “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.”

In a statement, Matt Helms, the public information officer for the Michigan Public Service Commission noted that Nessel’s filing was simply the latest step following her decision to pursue an appeal in April, and that there was nothing in the attorney general’s arguments that the commission hadn’t already reviewed and rejected when considering the case last year. 

“The Commission’s conditional approval of the power supply arrangements between DTE Electric and the Oracle-backed data center project, after thorough review of the unredacted contracts by the Commission, is fully consistent with decades of well-established legal precedent governing MPSC proceedings,” Helms said. “The ultimate approval included some of the strongest consumer protection requirements in the country – protections that would not be available under existing rate schedules without the Commission’s approval – and is projected to result in $300 million in annual savings for DTE’s other customers.”

In a separate brief filed Friday, Earthjustice, the Sierra Club, Michigan Environmental Council and the Natural Resources Defense Council similarly argued that the contracts should be overturned.

“The secretive and rushed approval of DTE’s deal for an Oracle AI data center robbed the people of Michigan of their right to evaluate its details and impacts through a contested hearing process, even as it exposed customers to nearly half a billion dollars in up-front costs,” Jacob Elkin, an attorney for Earthjustice, said in a statement. “This appeal is an important part of the fight to ensure that any such deals are reviewed in transparent, public processes, and to protect ratepayers from the unprecedented costs of these AI data centers. Anything less is a violation of the people’s rights under Michigan law.”

Danny Wimmer, Nessel’s press secretary, told Michigan Advance that the attorney general’s office and the environmental groups filed as separate appellants, though the Court of Appeals had consolidated their appeals into one docket. 

DTE maintains its contracts – and the process used to approve them – are all above board. 

“We’re reviewing the appeal but we’re confident – and the MPSC agreed – that our energy service contracts with Oracle offer some of the best customer protections in the country,” DTE Director of Corporate Communications Jill Wilmot told Michigan Advance in a statement Friday. “When submitting our contracts for approval, we followed the established regulatory process, which gives the Commission the authority to approve the contracts without a hearing.”