Michigan approves 1.4 gigawatts for OpenAI's Stargate data center as residents protest fast-track

Michigan Regulators Approve Stargate Data Center Power Deal

The Michigan Public Service Commission voted 3-0 to approve DTE Energy's request to supply 1.4 gigawatts of power to a planned hyperscale data center in Saline Township, about 40 miles southwest of Detroit 1

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. The $7 billion facility is part of OpenAI and Oracle's broader Stargate project, which aims to deliver more than 5 gigawatts of computing capacity across the United States 4

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. This marks Michigan's first hyperscale data center, with OpenAI and Oracle stating their partnership now encompasses over 8 gigawatts of planned capacity and represents more than $450 billion in investment over the next three years 5

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DTE Energy filed an ex parte motion with utility regulators, allowing the company to secure approval without a lengthy public hearing where opposing groups could present expert testimony and challenge the utility's claims 1

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. The decision drew immediate shouts of disapproval from onlookers in the Lansing conference room, with residents expressing deep frustration about being excluded from the process 4

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Local Opposition Mounts Against Fast-Tracked Approval

Residents of Saline Township feel railroaded by the entire process. The project was initially blocked by the Saline Township board, which denied a request to rezone farmland for the data center, but developers sued and obtained the land through a settlement 2

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. Once developers forced their way into the town of 2,328 people, they announced plans to build three separate 550,000 square feet facilities on 575 acres of farmland 2

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Wendy Albers, a resident of nearby Augusta Township, told the Michigan Public Service Commission: "I, along with everyone here... probably don't feel like they've been publicly served today. When you make these decisions, you're eliminating the very necessity of what public service bodies are all about" 1

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. Kathryn Haushalter, a Saline Township resident who filed a lawsuit against the township board for allegedly violating the Open Meetings Act, made a pointed observation at a recent rally: "If an idea's so great, AI is so great, so beneficial to our community, you don't have to sue your way in" 2

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Power Agreement Includes Ratepayer Protections

Despite local opposition concerns about electricity prices, the power agreement between DTE Energy and Green Chile Ventures, an Oracle subsidiary, includes several mechanisms designed to protect ratepayers 1

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. The contract requires that Green Chile Ventures pay 80% of the contracted capacity whether or not it actually uses it, with this ready-to-serve provision helping ensure DTE's expenditure on grid infrastructure won't be passed on to average consumers 1

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The 19-year contract gives DTE ample time to recoup its expenses from the data center rather than from the community, and if the data center fails to pay its energy costs, DTE cannot pass them on to other consumers 1

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. Commissioners agreed with DTE's conclusion that the deal would actually save ratepayers $300 million annually by tapping the tech firm to pay for battery storage and other costs to connect it to the grid 4

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. Utility regulators tacked on additional conditions, requiring DTE to absorb the financial hit if the projected savings fail to materialize 4

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Environmental Impact and Transparency Concerns Persist

Public speakers lined up to condemn the vote, raising concerns about lost farmland and habitat, rising power rates, climate pollution from fossil fuels used to generate computing power, and additional pollution from water used to cool servers 4

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. Tim Bruneau, a Saline Township resident, warned: "We won't be happy, I suppose, until the Great Lakes run dry, until the farmlands all are gone, until all the air is polluted" 4

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Attorney General Dana Nessel criticized the fast-track process, pointing to redacted contracts and a lack of transparency 3

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. The Sierra Club urged the commission to deny the fast-track request, with Tim Minotas, legislative and political director for Sierra Club Michigan, stating: "It's not surprising that Wall Street is losing faith in a rushed plan to erect a massive data center in Saline Township. We've said all along that this speculative project requires serious scrutiny and public input" 3

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Funding Snag Raises Questions About Project Viability

The project's financing fell into doubt after Blue Owl Capital walked away from talks over investing in the data center, according to the Financial Times 3

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. Blue Owl was concerned over possible delays and didn't like the existing lease terms and debt terms 3

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. However, a spokesperson for Related Digital disputed this report, stating the project is moving forward as planned and calling the notion that Blue Owl walked away "unequivocally false" 3

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. Oracle told Bloomberg that its investment discussions were "on schedule" but did not involve Blue Owl 3

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The data center's projected power demand would increase DTE's electric load by 25%, with DTE planning to absorb that surge without building new power plants by buying energy on the open market and getting more use out of existing facilities 4

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. DTE has told investors it aims to bring on as much as 8.4 gigawatts of total data center load in the coming years, a projection that would nearly double the utility's total power demand 4

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. According to Data Center Watch, at least 20 similar projects have been blocked by communities across the country in the last three months as citizens push back against their uninvited new neighbors 2

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. Senator Bernie Sanders recently called for a nationwide pause on data center construction, arguing that companies are intentionally trying to push these projects through before lawmakers and citizens can catch up 2

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. AI companies are racing to secure computing capacity before investor confidence wavers, with doubt starting to build even on Wall Street about whether AI can generate sufficient revenue to justify the massive investment 2

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