DTE Energy seeks approval for two gas plants amid Michigan datacenter growth

Ratepayer protections will be determined in later Michigan regulatory cases

DTE Energy has asked the Michigan Public Service Commission to approve a long-term energy delivery plan that includes developing a combined 2.1 gigawatts of gas plants in 2031 and 2032 in counties just outside metro Detroit. The Guardian put the potential customer burden at $6.4 billion, and about 2.3 million electric customers in southeast Michigan could be affected. The Guardian described the potential burden on ratepayers, especially residential customers, as “a microcosm of similar tensions nationwide” and said it highlighted “how the utility industry benefits from unchecked datacenter growth.”

DTE is Michigan’s largest energy provider and one of the nation’s biggest utilities. Growth in datacenter electricity demand is driving the company’s proposal to double its electric grid capacity over the next 20 years, although the plan does not yet resolve how residential customers would pay for the added infrastructure.

The utility has already contracted with Google and Oracle to provide a combined 2.4 gigawatts of electricity to hyperscale datacenters, enough to power more than 1.8 million homes. DTE was poised to announce two more hyperscale contracts, which could bring its total under contract to roughly 6 gigawatts by the end of the year. If all those projects materialize, more than two gas plants could be required.

At its peak, DTE’s grid already demands more than 9.5 gigawatts of power while its capacity is 11 gigawatts. DTE may already exceed that capacity with the datacenters for which it has contracts, and it may soon announce several more. The Guardian reported that DTE also develops gas infrastructure across the United States, so its parent company benefits from datacenters and is incentivized to add more to the grid.

DTE has said the gas plants will replace a coal plant that is being retired, but the retirement agreement was developed in 2023. Around that time, DTE said it would need about 940 megawatts of gas generation in the long term. The utility now says it needs about 2.3 times more gas generation than previously anticipated, a comparison that The Guardian reported raises questions about whether the coal plant closure is truly a driver of the gas expansion.

The Guardian said datacenters may also derail what it called Michigan’s “nation-leading climate transition laws.” Michigan passed legislation in late 2023 requiring utilities to transition to renewable energy by 2040. The law included an off-ramp allowing utilities to continue operating or building fossil-fuel plants if renewable sources cannot handle the grid’s load. DTE’s proposed generation mix could come close to meeting the climate law’s requirements, but that calculation relies partly on unproven carbon-capture technology. More gas plants could also be built if additional datacenter contracts are approved, which The Guardian reported appeared likely.

DTE said in a press release that its plan reflected what customers said mattered most to them. “We designed this plan to be achievable and affordable – grounded in real analysis and feedback from customers and built to deliver cleaner energy while meeting Michigan’s growing needs for the next 20 years and beyond,” said DTE Electric president Matt Paul. The proposal also calls for a significant increase in renewable energy and battery storage, which consumer advocates praised as a positive step. Those resources would accompany, rather than replace, the proposed gas generation.

The commission will take input from industry, environmental groups, consumer advocates and other interests before issuing a preliminary decision within 300 days. DTE’s filing includes analysis of the effects on ratepayers, including residential customers, but protections will not be determined until later regulatory cases.

“DTE’s approach to the question of ‘who pays’ is unclear, convoluted, and does not ensure that ordinary ratepayers won’t foot the bill for these new, energy-hogging neighbors,” said Helen Li, a senior attorney with Earthjustice, which is representing the Sierra Club in the regulatory case. “We are very comfortable with saying that the amount they are currently requesting – the vast majority of that could be attributed to datacenters,” Li said.

Public opposition to datacenter development was visible in December 2025, when residents picketed DTE in Detroit on 3 December and rallied against a planned $7 billion Stargate datacenter on farmland in Saline on 1 December. Yousef Rabhi, a public power advocate and former state representative who in August won the Democratic nomination for mayor of Ann Arbor, said any plan to charge residential customers for datacenter infrastructure would be deeply unjust.

“People who are struggling to feed their kids, to put diapers on their babies, to keep the lights on – those people are going to be subsidizing the wealthiest people on the planet to help them make more money, and that is insanity,” Rabhi continued. “This blows a hole in the state’s clean energy laws,” Rabhi also said. “Of course they are going to build fossil fuel, and there is a massive environmental cost to this.”

The Michigan Public Service Commission regulates the state’s private utilities and has previously drawn criticism over whether residential customers should effectively subsidize datacenters. The Guardian reported that the commission’s leadership is filled with appointees of Michigan Gov. Gretchen Whitmer, a pro-business, big tech ally who has seen her popularity in the state fall partly over her support for datacenters, which are unpopular.

The Michigan Public Service Commission will issue a preliminary decision after taking input, but ratepayer protections will be addressed in later cases. Until then, the proposal leaves the potential $6.4 billion customer burden unresolved.