The Michigan Public Service Commission (MPSC) on November 6, 2025, approved Consumers Energy’s application to amend its General Service Primary Demand (GPD) rate tariff to address service for large data center customers.
The order, issued in Case No. U-21859, establishes new rules for customers with a minimum service threshold of 100 megawatts (MW), or aggregated loads of 100 MW with individual sites of at least 20 MW under common ownership.
The commission added provisions to ensure that other ratepayers are not subsidizing data center costs, while leveraging potential system benefits created by large, consistent data center demand.
Key Provisions Approved by the Commission
Under the order, data centers taking service under the amended tariff will be subject to several new requirements, including:
- Contract term: Minimum 15-year agreement, with a possible ramp-up period of up to five years.
- Automatic extensions: Five-year extensions, with four years’ notice required for termination.
- Minimum billing demand: Monthly billing at 80 percent of contract capacity.
- Administrative fee: Upfront project proposal fee of $100,000, reconciled to Consumers Energy’s actual costs.
- Financial security: Default collateral requirement equal to half of the required exit fee, decreasing over the contract term, in the form of a standby irrevocable letter of credit or cash, not including a parent guarantee.
- Exit fee: If the customer leaves early, the fee equals the minimum monthly bill multiplied by the agreement’s remaining months. Consumers Energy must attempt to mitigate this cost, potentially by reallocating unused capacity.
- Contract adjustment: With four years’ notice, customers may request a one-time capacity reduction of up to 10 percent.
- Service suspension: Possible if demand exceeds the contracted capacity by 1 MW or more.
Consumers must file ex parte applications with the commission prior to each large-load customer’s taking service to show compliance with the tariff requirements and that the costs caused by the interconnecting large-load customer to be served under this tariff are not being paid for by other customers.
The commission did not address cost allocation, rate design, or broader issues related to the impact of data center load on the state’s renewable and clean energy standards in this order, emphasizing the urgency of implementing the protections in the new tariff.
Background on the Application
Consumers Energy initially filed its application on February 7, 2025, on an ex parte basis, seeking to amend its GPD tariff, the company’s existing rate for large industrial customers, to better manage the risks and requirements of serving new data centers with loads of 100 MW or more.
The utility proposed that these amendments would ensure equitable treatment between data centers and other ratepayers while supporting Michigan’s clean energy transition.
Stakeholder Proceedings and Issues Raised
After several parties objected to ex parte treatment, the MPSC opened an expedited contested case with formal hearings and briefing.
Intervenors included Michigan Attorney General Dana Nessel, several data center interests, environmental organizations, an association of industrial customers, as well as several clean energy trade associations, which were represented in the case by Varnum attorneys Laura Chappelle, Timothy Lundgren, and Justin Ooms.
Among the issues raised by intervenors were:
- Whether data centers should receive unique rate treatment or be included under a general large-load tariff.
- Whether the 100 MW threshold should be raised or lowered.
- Whether large-load customers should remain under Rate GPD or be placed in a new rate class.
- Whether contract terms, billing provisions, and financial protections were overly strict or insufficient.
- How data center growth might affect Michigan’s clean energy and carbon reduction goals.
- Whether customers should be required to submit clean energy sourcing plans or be permitted to obtain a preference for interconnection if they submit clean energy sourcing plans.
- Whether the tariff should contain options to maximize the input large customers can have into the resources serving their loads, and maximize the efficiency with which these loads can be served.
Impact and Next Steps
The MPSC’s decision provides greater clarity and predictability for data center developers and operators seeking service from Consumers Energy.