Michigan has emerged as a leader in the clean-energy transition in the United States. However, an "offramp" provision in its 2023 climate and clean energy laws could hinder the state's plans and is raising questions about whether utility consumers will end up paying the price. 

What's happening?

In November 2023, Gov. Gretchen Whitmer signed legislation aimed at improving public health, protecting resources like drinking water, and driving down costs for consumers. As part of that plan, Michigan announced it would generate 100% of its energy from clean sources by 2040.

Yet the bill included an important caveat: Dirty energy plants could remain active if the state wasn't generating enough power to meet demand. As detailed by Inside Climate News, data center development in the Great Lakes State is stressing the grid and could trigger this "offramp."

Michigan's largest utility provider, DTE, is in negotiations with major tech companies to provide power for new data centers, and it says building a new gas plant may be necessary to meet demand, according to the report.

Why is this important?

At this time, it is unclear whether residents will shoulder the burden of paying for electric expansion costs caused by data center development.

Chris Gilmer-Hill, a policy associate with the Michigan Environmental Justice Coalition, explained to ICN that this was a key reason why opponents of 2024 tax incentives for data centers fought so hard against the legislation.

While data centers can create local jobs and are increasingly relying on renewable energy — with some arguing they could even speed up a clean-energy transition — they also have the potential to drive dirty energy development, as the case in Michigan demonstrates. Studies have linked air pollution from dirty fuels to debilitating illnesses and premature death.

"Looking back to the fight over the incentives, this is absolutely what DTE wanted to happen," Gilmer-Hill said. "DTE's theory is if they can find a way to easily jack up demand that has to be met no matter what, then they can build coal or methane or gas plants." 

What's being done about this?

Douglas Jester, a partner at energy consulting firm 5 Lakes Energy, told ICN that the offramp doesn't change the obligation for companies to try to comply with Michigan's clean and renewable energy standards.

However, critics are wary of how things will play out because DTE has donated millions of dollars to Gov. Whitmer and the state Democratic Party. According to the Detroit Metro Times, DTE has also contributed to campaigns for 138 of the state's 148 senators and representatives.

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"There were multiple attempts made to protect our climate goals and ratepayers, and those did not move because DTE controls the state Legislature with its contributions," Voters Not Politicians executive director Christy McGillivray told ICN.

"It is not popular to hike up energy rates so Silicon Valley billionaires build out infrastructure to raid our entire government — no one voted for that," she added.

You can contact your representatives if you want to make your voice heard on this matter.

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