Data Center Site Selection in Michigan: DTE, Consumers, Tax Rules and Water

Michigan’s pitch combines two large regulated utilities that are actively seeking data center load, a renewed tax exemption, a cool climate and access to Great Lakes water. Natural gas supplied about 45% of the state’s net generation in 2024, more than four times its share a decade earlier, and renewables supplied 12%, led by wind.¹² DTE Electric and Consumers Energy, the state’s two largest utilities, have both set terms meant to make large loads pay their own way.¹²

The constraints are local. Township boards control zoning, and many paused data center applications in 2026 while they wrote rules.⁶ Water use, often hidden behind nondisclosure agreements with local governments, became a statewide political issue.¹³ For the wholesale market and planning context, see our MISO guide; for nearby comparisons, see Ohio, Indiana and Wisconsin.

Consumers Energy’s large-load tariff

On November 6, 2025, the Michigan Public Service Commission (MPSC) approved terms of service between Consumers Energy and large data centers in Case No. U-21859, aiming to capture grid benefits while ensuring new large loads pay the full cost of serving them.² The tariff applies to customers of 100 MW or more, or aggregated loads of 100 MW under common ownership where individual sites are 20 MW or more. It requires a minimum 15-year contract, a minimum bill of 80% of contracted demand, a ramp period of up to five years, a $100,000 project proposal fee and collateral equal to half the exit fee, provided as a letter of credit or cash rather than a parent company’s pledge. Customers may request a one-time capacity reduction of up to 10% with four years’ notice.⁸

DTE Electric and the Saline Township contracts

DTE served its first very large load through special contracts. The MPSC approved them unanimously on December 18, 2025, for a 1,383 MW data center in Saline Township being built by Oracle and Related Digital for OpenAI. Approval was conditioned on DTE absorbing any costs it cannot recover from the Oracle subsidiary, and on the data center’s load being reduced or interrupted before service to other customers in an emergency.¹ The contracts require a minimum 19-year term rather than five years, 80% minimum billing demand rather than the standard 50–60%, and termination payments of up to 10 years of minimum billing. The Commission directed DTE to propose a general very-large-load tariff, filed as Case U-22061, which was still being litigated in August 2026; check the docket for a final order.⁹⁵

Our guide to large-load tariffs and electric service agreements explains how minimum bills, exit fees and curtailment terms affect underwriting.

Public Acts 181 and 207 of 2024 amended the Use Tax Act and General Sales Tax Act to exempt data center equipment used by a qualified entity in an enterprise data center; the exemptions took effect on April 2 and April 17, 2025.³ Michigan already had a narrower exemption from 2015, and the new law extends it to 2050 for qualified data centers and to 2065 for facilities on brownfield or former power plant sites.⁴³ House passage was delayed by concerns from environmental groups about data centers’ energy and water use.⁴

• Capital investment of at least $250 million.³
• At least 30 full-time jobs paying 150% or more of the prosperity region’s median wage, maintained through 2050, or 2065 for brownfield and former power plant sites.³
• No use of certain electric rates, such as the long-term industrial load rate.³
• No certain property tax benefits unless the local government approves by resolution.³
• A certificate from the Michigan Strategic Fund; none will be issued after December 31, 2029.³

The property tax condition matters for landowners and townships: abatements are not automatic, so local negotiation remains part of the deal. Confirm current requirements with the Michigan Economic Development Corporation and tax counsel, and see our sales tax exemptions by state and property taxes guides.

The Saline Township project shows the full Michigan approval path. It sits on farmland south of Ann Arbor; the township board voted against rezoning the land in September 2025 and later settled after landowners and Related Digital sued. The MPSC approved DTE’s contracts without a contested case, which drew criticism from Attorney General Dana Nessel and environmental groups.¹⁴¹

State environmental permits followed. In January 2026 the Department of Environment, Great Lakes, and Energy (EGLE) granted air and wetland permits that allow about 9 acres of wetlands to be filled and 15 diesel backup generators to be installed.¹⁵ The developers held a construction celebration in June 2026 for a campus of three single-story 550,000-square-foot data halls, and they say its closed-loop, non-evaporative cooling will keep daily water use comparable to an office building.¹⁶

Our guides to wetlands and generator air permits cover those two permit tracks.

Michigan already regulates large water withdrawals, and depending on design and location, EGLE review of a data center may cover withdrawals as well as other permits under the Natural Resources and Environmental Protection Act.⁷ Those rules sit within the Great Lakes–St. Lawrence River Basin Water Resources Compact, a binding agreement among eight states and two Canadian provinces. Critics note that withdrawal volumes are often shielded by nondisclosure agreements between companies and local governments.¹³

In June 2026 Senate Democrats introduced a package that would go further. Senate Bill 1046 would require a permit and public hearings for facilities consuming more than 550,000 gallons of water per day and let EGLE monitor data center wastewater; Senate Bill 1047 addresses electricity rates and large-load utility classes.¹¹ As of the latest reporting, the package had not passed.

Townships moved faster. Many adopted temporary moratoriums in 2026 while they wrote zoning rules: Lenox Charter Township’s runs four months with one possible extension, and Springfield Township’s 180-day pause bars data center plans from being accepted for review.⁶ Plan for closed-loop cooling and clear water disclosures, and see our guide to moratoriums.

1. 01Confirm the serving utility and whether the load will fall under Consumers’ 100 MW tariff or DTE’s pending large-load tariff.⁸⁵
2. 02Model a 15- to 19-year commitment with 80% minimum billing and the required collateral before signing land options.⁹
3. 03Check whether the township has a moratorium or new data center zoning rules.⁶
4. 04Test the project against the $250 million and 30-job thresholds for the tax exemption, and whether a brownfield or former power plant site extends the term.³
5. 05Screen wetlands and generator air permitting early, as at Saline Township.¹⁵
6. 06Choose a cooling design that keeps water use low and can be disclosed, given pending water legislation.¹¹

If you want an independent read on a specific tract, you can get a site reviewed.