Google gets its Michigan gigawatt, and a $2.5 billion price to walk away
Michigan approved 20-year contracts that bill Google for 80% of its contracted load even if the servers sit idle, short of the 90% the attorney general demanded. The same day, county leaders preserved Google's $125 million tax break, and DTE's $6.4 billion gas-plant ask is queued behind it.
Vincent Jiang · 3 min read
On 1 October, Michigan's utility regulators voted without dissent to let DTE Energy power Google's 1-gigawatt data center in Van Buren Township, west of Detroit Metro Airport. It is only the second hyperscale contract the state has authorized, and the first decided in a fully contested case with cross-examination, unlike the fast-tracked December approval for Oracle and OpenAI's 1.4-gigawatt site in Saline Township 12. "Google is one of the biggest, best capitalized and most profitable companies on the planet," commission chair Dan Scripps said before the vote. "Google can pay its own energy bills" 13.
Twenty years of bills, 80 percent guaranteed
The load equals roughly 750,000 homes, drawing power from December 2027 and reaching full demand by the end of 2028 123. Google pays whether the servers hum or not: minimum monthly billing at 80 percent of contracted capacity, against 50 to 65 percent under DTE's standard large-load tariff, plus a termination payment of up to $2.5 billion covering at least 15 years of minimum charges 137. Google also funds up to 1,600 megawatts of renewables and 480 megawatts of batteries that DTE will own and operate 37.
Google's 80% minimum billing sits well above DTE's standard large-load tariff
Data
| Value | |
|---|---|
| Standard tariff, low end | 50% |
| Standard tariff, high end | 65% |
| Google contract | 80% |
The AG asked for 90 and got 80
Attorney General Dana Nessel pressed in an August brief for 90 percent minimum billing and an exit fee priced on the full remaining contract, warning of "cost shifting risks of unprecedented scale for Michigan ratepayers" 12. She settled at 80 percent and a $2.5 billion cap. The same day, Wayne County commissioners voted 13-0 to override their executive's veto and preserve $125 million in tax breaks, half off property taxes for 12 years on more than $2 billion of computer equipment 345.
DTE is spending ahead of the verdict
DTE claims the contract hands other customers $1.7 billion in affordability benefits; testimony in the case found that figure significantly inflated, and Scripps acknowledged the discrepancy 13. The spending is already real: quarterly capital expenditure hit $1.49 billion in Q2 2026, up 54.5 percent in a year 6. DTE separately proposes $6.4 billion in gas plants, including a 700-megawatt unit due in 2032 that mirrors the 727-megawatt hypothetical plant its own modeling floated in this very case 18.
DTE capex jumped 54.5% in a year while its data center contracts closed
Data
| DTE capex | |
|---|---|
| Q3 '24 | $1.13B |
| Q4 '24 | $1.25B |
| Q1 '25 | $0.87B |
| Q2 '25 | $0.97B |
| Q3 '25 | $1.22B |
| Q4 '25 | $1.34B |
| Q1 '26 | $1.23B |
| Q2 '26 | $1.49B |
Google will pay its own way, DTE says
The utility says Google covers the full cost of the site, and the order requires DTE to certify in writing within 30 days that Google's payments absorb every data center cost, with none falling on other customers 17. The Environmental Law and Policy Center credits the commission with holding DTE accountable but faults it for not pushing Google to fund distributed alternatives 2.
October 14 and the thirty-day clock
Van Buren planners vote on the final site plan on 14 October, while residents pursue recalls against all nine township board members and polls show 70 percent of Michiganders oppose data centers in their communities 13. The template is set: every contested utility-AI contract now gets measured against 80 percent and $2.5 billion. Michigan has decided Google pays first; the gas case will decide who pays last.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
