Google Ties Data Center to 20-Year Power Deal, Solar Investment

Alphabet Inc.’s Google is moving ahead with plans for a major data center in Michigan that features a 20-year electricity contract requiring it to cover the full expense of adding a haul of new clean power.

The agreement with DTE Energy Co. underscores the intense competition to connect such facilities to the power grid, as well as community concerns that such projects raise utility bills. The project expects to use as much as one gigawatt of electricity, with service starting in December 2027 and reaching full load in late 2028, DTE wrote in a regulatory filing on Tuesday.

The rush by big technology companies to build massive data centers for their operations and artificial intelligence ambitions has strained the electric grid and raised utility expenses for homes and small businesses in some US regions. The issue has reached the highest levels of US politics, with President Donald Trump calling for tech firms to defray electricity costs.

Google said it’s evaluating a site in Van Buren Township near Detroit. The township’s website currently lists a data center project named “Project Cannoli” that attracted community opposition in January.

Currently, DTE produces most of its electricity from fossil fuels, with about 41% coming from coal, 26% coming from natural gas and the remainder coming mostly from nuclear and wind, according to its website. Google said in its statement that its data center operations will be served by 2.7 gigawatts of new resources, including solar, storage and demand flexibility.

The arrangement that Google and DTE are proposing is unusual. For starters, a 20-year contract — especially one for an amount as massive as one gigawatt — is significantly longer than the typical utility-customer agreement, a fact that DTE acknowledges in testimony filed with regulators. Google’s commitment in turn to fully cover the costs of 1,600 megawatts of new renewable energy and 480 megawatts of battery storage is also novel and may serve as a playbook for other tech firms desperate electricity to power their ever-growing AI computing needs.

Google’s contract with DTE requires approval from the Michigan Public Service Commission, the state’s utility regulator. Power deals for big data centers have drawn scrutiny in Michigan. Last month, Attorney General Dana Nessel sought reconsideration of the approval for DTE to power a massive data center development planned by Oracle Corp. and OpenAI.