Google Wants a Gigawatt of Michigan Electricity. Who Carries the Risk?

By Chelsea Wooton

A 1-gigawatt Google data center is moving closer to reality in Michigan, roughly 80 miles by road from Lansing, after state regulators unanimously approved the electricity contracts between Google and DTE Energy.

And while “Google is paying for its electricity” sounds pretty straightforward, the details are where this gets interesting.

The proposed facility, known as Project Cannoli, would occupy about 282 acres in Van Buren Township, north of I-94 between Haggerty Road and I-275.

The data center is expected to begin taking electricity in December 2027, with maximum projected demand reached by December 2028. One gigawatt is 1,000 megawatts, an enormous amount of electricity for a single customer.

So the question isn't simply whether DTE can supply that much power.

It's who carries the financial risk if Google's electricity demand doesn't turn out exactly as projected.

What did regulators actually approve?

On Oct. 1, the Michigan Public Service Commission unanimously approved special contracts between DTE Electric and Google.

The case, MPSC Case No. U-22058, went through a fully contested proceeding, meaning the commission, its staff and intervenors had access to the case record and could examine the proposed contracts before the vote.

But there's an important distinction:

The MPSC approved the utility contracts. It did not approve the data center's local site plan.

The commission's authority in this case was limited to the terms and conditions of utility service and protections for DTE's other customers. It does not have authority over whether or where the data center is allowed to locate.

The primary electricity agreement lasts 20 years.

Google must pay a minimum monthly charge based on 80% of its contracted electricity demand, even if its actual usage is lower.

If Google terminates the agreement early, the contract requires payments designed to ensure Google pays at least 15 years of minimum monthly charges. Credit and collateral requirements are also included to protect against certain costs if the facility stops operating earlier than expected.

Then there's the clean-energy side of the deal.

Google will pay for DTE to develop up to 1,600 megawatts of renewable energy and 480 megawatts of battery storage to serve the data center. DTE will develop, own and operate those resources, while Google pays their full costs.

But what if Google's plans change?

That's where Michigan Attorney General Dana Nessel pushed for stronger protections.

Nessel argued that an 80% minimum billing requirement wasn't enough and recommended a 90% minimum. She also sought stronger early-termination protections and additional cost tracking to make sure other ratepayers don't end up subsidizing the project.

The concern is stranded-asset risk.

In plain English: DTE could make investments based on Google's projected electricity demand, only for Google to ultimately use less power, delay operations or leave before those costs are recovered.

DTE says the approved agreement protects existing customers and estimates the Google contract could provide a $1.7 billion benefit to other customers over 20 years.

But let's put an asterisk on that number:

$1.7 billion is DTE's projection. It isn't $1.7 billion already guaranteed to Michigan ratepayers.

The MPSC says the conditions it approved are designed to ensure other DTE customers don't subsidize the project or become responsible for its costs and financial risks.

This is bigger than one data center

Project Cannoli isn't happening in a vacuum.

The MPSC previously approved special DTE contracts for a 1.383-gigawatt data center in Saline Township involving Oracle and OpenAI. That decision was made through a different process and has drawn continued scrutiny from Nessel over ratepayer protections and transparency.

Michigan is now dealing with a broader question about how utilities handle customers that can require enormous amounts of electricity.

The issues aren't limited to the electricity bill.

They're about generation, transmission, battery storage, grid reliability and who pays when the projections behind a massive project change.

What's next?

The MPSC vote clears an important regulatory hurdle, but Project Cannoli still needs local approval.

For those of us in Lansing, this isn't a data center being built down the street.

It's roughly 80 miles away.

But the decisions surrounding it are part of a much bigger Michigan question:

How do we accommodate customers that need an extraordinary amount of electricity without shifting the financial risk onto everyone else?

The MPSC has approved protections it says are designed to address that risk for Google's project.

Now we get to see how those protections work in the real world.

That's the part I'll be watching.

Sources for the Google/DTE data-center story: MPSC Case U-22058 and Oct. 1 commission meeting materials are the primary sources. I've also included the Michigan AG's filing, DTE's case filing, and the current Michigan Public report for additional context and attribution.