Must Foot the Bill: Michigan's Commission Approves Battery Storage for a Data Center

On March 27, 2026, the Michigan Public Service Commission published a release headed "MPSC goes big on batteries, approving six energy storage contracts totaling 1,332 megawatts." Three of those projects are for one data center. The release is not the commission's orders, and says so: it "is not intended to modify, supplement, or be a substitute for the Commission's orders." Parts of it follow, not the whole.

Six Projects, and the Three for a Data Center

The first three projects "will provide a combined 1,000 MW of energy storage capacity" to fulfill a settlement agreement in the most recent approved integrated resource plan of a utility, which the release names. That agreement, the release says, "identified at least a 850 MW need for energy storage projects."

The other three are storage projects of the same utility "that will serve the 1,383 megawatt (MW) data center" being developed in Saline Township, in Washtenaw County. The commission had approved the utility's application for that data center on December 18, 2025, "imposing mandatory safeguards to prevent residential and other customers from subsidizing its costs."

Storage the Developer Pays For

The three data center projects, the release says, "are the first 332 MW of 1,383 MW of company-owned energy storage facilities" that the data center's developer "must foot the bill to develop to match the data center's contracted demand."

Under the terms of the approval of the data center, the developer "will bear the costs over a 15-year period to develop the energy storage for the project." The utility "will develop, own and operate the facilities to benefit its grid," and the developer "will receive the value of any market revenues from operating the facilities in the wholesale market."

The batteries are the utility's to own and run, and the developer's to pay for. For anyone lending to the developer, that is a cost that runs for years, tied to a data center that was still being developed.

A Rehearing Denied

The same release records that the commission denied petitions for rehearing, and motions to reopen the case, on its approval of the data center's special contracts. It found, among other things, that those who petitioned for rehearing "lacked standing to petition for rehearing." It also denied a request for a contested proceeding on the utility's application for approval of "battery contracts related to the data center, finding that the contracts met the requirements for ex parte consideration."

The release says the commission's initial approval "included the nation's strongest protections to prevent other customers from having to pay the data center's cost." Those protections include the utility "agreeing to be responsible for costs it is unable to recover" from the developer. Additional protections included a minimum contract duration of 19 years and a minimum billing demand of 80%, which "requires the data center to pay a minimum of 80% of its contracted electric use even if actual use is lower." Another is a termination payment of up to 10 years' worth of minimum billing demand "if the facility stops operating before its contracted date."