Michigan Energy Regulator Moves Forward with Massive Battery Storage Approval Amidst Pushback

LANSING — The Michigan Public Service Commission (MPSC) approved six energy storage contracts totaling 1,332 megawatts (MW) of capacity on Friday, a move that will significantly expand the state's battery storage capabilities while also serving a massive data center being built in Washtenaw County.

The decision, announced by the commission, includes three projects delivering a combined 1,000 MW to fulfill settlement agreements related to DTE Electric's integrated resource plan, and three additional projects totaling 332 MW that will support a 1.383 GW data center being developed by Green Chile Ventures LLC, a subsidiary of technology company Oracle.

Grid Reliability Investment

The first three energy storage projects approved include:

  • 450 MW Big Mitten Energy Center in Huron County, with a 20-year tolling agreement
  • 350 MW Monroe I Energy Center in Monroe County, with a self-build contract
  • 200 MW Fermi Energy Center, also with a self-build contract

Together, these projects will satisfy the settlement agreement's requirement for at least 850 MW of energy storage to meet DTE Electric's electric capacity requirements established in the 2023 integrated resource plan settlement.

The MPSC Chair Dan Scripps stated during the meeting: "The order in whole represents a balanced order that provides meaningful support for ongoing reliability-based investments, while being mindful of the affordability concerns that are always front and center."

Data Center Battery Storage

The last three contracts involve DTE-owned battery storage facilities that will serve the Oracle data center in Saline Township, Washtenaw County:

  • 132 MW Fish Creek Energy Center
  • 100 MW Cold Creek Energy Center
  • 100 MW Pine River Energy Center

The commission approved DTE Electric's application for the data center on December 18, 2025, imposing what officials describe as "mandatory safeguards to prevent residential and other customers from subsidizing its costs."

Under the approval terms, Oracle, through Green Chile Ventures, must cover the costs over 15 years to develop the energy storage for the project. The 332 MW of battery storage approved for the data center exceeds the capacity of DTE Electric's 1,150 MW Blue Water Energy Center, the state's most recent natural gas-fired plant.

Commissioner Concerns

While the commission moved forward with unanimous approval, Commissioner Katherine Peretick expressed concerns about the approval process.

"The record in this case reflects Consumers' substantial investment proposals, but also significant concerns from intervenors that not all spending is sufficiently tied to measurable outcomes or justified on a cost-to-benefit basis," Peretick said. "As highlighted in the record, many customers are already struggling to pay their utility bills, and it is imperative for the utility to prioritize investments that deliver the greatest reliability improvements per dollar spent."

Commissioner Shaquila Myers echoed similar sentiments, noting that "the company has been directed to clearly demonstrate how its investments translate into measurable reliability benefits, evaluate cost effectiveness and continue to consider the overall impact on customer affordability."

Attorney General Pushback

Michigan Attorney General Dana Nessel criticized both the rate increase and the battery storage approvals, particularly regarding the data center contracts.

"The Michigan Public Service Commission continues to perform a grave disservice to the State of Michigan and the utility customers of this state, to the only apparent benefit of the utility corporations and their new billion-dollar AI customers," Nessel said in a statement.

Nessel's office had previously filed requests to reopen and review the DTE Energy contracts for the planned 1.4-gigawatt data center in Saline Township, as well as petitions to review six DTE contracts involving battery storage facilities connected to the data center project.

"The Commission's initial approval of the data center included the nation's strongest protections to prevent other customers from having to pay the data center's cost," the MPSC stated in denying the attorney general's petitions. "Those protections include the utility agreeing to be responsible for costs it is unable to recover from Green Chile Ventures. Additional protections included a minimum contract duration of 19 years, a minimum billing demand of 80% that requires the data center to pay a minimum of 80% of its contracted electric use even if actual use is lower, and a termination payment of up to 10 years' worth of minimum billing demand if the facility stops operating before its contracted date."

The MPSC determined that the Attorney General and others who requested rehearing did not have standing to do so, and failed to identify any errors, new evidence, or unforeseen consequences that would justify reopening the proceedings.

Broader Energy Storage Push

The battery storage approvals come as part of Michigan's broader push to make the grid more reliable during storms, support renewable energy transitions, and balance load with large projects like data centers.

Energy storage helps ensure grid resilience by storing excess energy created when it's cheaper to produce and using the stored energy during times of peak demand. The MPSC has emphasized that "energy from renewable sources paired with energy storage is significantly cheaper than energy produced from coal or natural gas, reducing costs to customers."

The total capacity of the battery storage projects approved for the data center project is greater than the capacity of DTE Electric's Blue Water Energy Center, which was approved by the MPSC in 2018.

Coordinated Approval with Rate Increase

The battery storage approvals came alongside the MPSC's approval of a $276.6 million rate increase for Consumers Energy, which will raise electric rates for consumers by 8.9% starting May 1, 2026.

The commission maintained Consumers Energy's return on common equity at 9.9% and a capital structure of 50% equity and 50% debt. The utility had sought a return on equity of 10.25% and a capital structure of 50.75% equity and 49.25% debt.

A typical residential customer using 500 kilowatt-hours (kWh) a month will see an increase of $6.46, or 6.1%, in their monthly bill. The new rates will take effect May 1, 2026.

Consumers Energy said the upgrades are part of its 2026 Reliability Action Plan, which is designed to improve service for nearly two million electric customers across the state. The company highlighted recent improvements, noting that the average customer experienced about an hour less outage time since 2021, a roughly 28% reduction.

Local Impact

The battery storage projects span multiple Michigan counties, including Huron County, Monroe County, and Washtenaw County. The Big Mitten Energy Center in Huron County has already sparked local debate, with some community members expressing concerns about large-scale development in rural areas.

The MPSC noted that the approvals move DTE Electric forward in meeting terms of its most recent integrated resource plan, approved in a 2023 settlement agreement, which among other things called for adding 15,000 MW of solar and wind energy generation in Michigan.

Energy Transition Acceleration

The commission's decisions come as the state continues to grapple with the implications of rapid data center development alongside traditional energy infrastructure investments. The 1,332 MW of battery storage represents a significant portion of Michigan's energy storage portfolio and will play a key role in balancing the grid as renewable energy generation increases.

Energy storage provides multiple benefits to the grid by storing excess energy created when it's cheaper to produce and using the stored energy to provide power during times of peak demand. The MPSC has stated that these projects will "bolster grid reliability and support the state's energy transition."

The first three energy storage projects will provide a combined 1,000 MW of energy storage capacity to fulfill the settlement agreement in DTE Electric's most recent approved integrated resource plan. The last three contracts are energy storage projects owned and operated by DTE Electric that will serve the data center being developed by Green Chile Ventures LLC in Washtenaw County's Saline Township.

As Michigan continues to balance grid reliability needs with customer affordability concerns, the MPSC's recent decisions highlight the complex trade-offs involved in modernizing the state's energy infrastructure while serving the growing demands of large-scale technology projects.