House Bill 5982 would add a new section to Michigan’s public utilities law governing utility service arrangements for large-load data centers. The bill defines a “large-load data center” as a data center reasonably projected to reach a coincidence peak electric demand of 100 megawatts or more within 36 months of starting service, including expansions, and requires the Michigan Public Service Commission to aggregate demand across affiliated and functionally integrated facilities when making that determination.
The core of the bill is procedural. If an electric, municipal, cooperative, or gas utility enters into a contract, tariff, rider, amendment, or approval that gives a large-load data center preferential or individualized rates, terms, or conditions that materially differ from generally applicable tariffs, the commission must review that arrangement in a contested case under the Administrative Procedures Act before it can take effect. The bill bars ex parte approval and makes clear that such a request has no legal force and cannot be implemented or relied on until the commission issues a final order approving it. At the same time, the bill states it does not change substantive ratemaking standards, limit the commission’s discretion to approve or deny a request, or prevent a data center from receiving service or expanding operations.
The bill would amend 1939 PA 3, Michigan’s public utilities act, by adding procedural safeguards for utility agreements with very large data centers. It would affect electric utilities, municipally owned electric utilities, cooperative electric utilities, gas utilities, the Public Service Commission, and large data center customers by requiring formal contested-case review for nonstandard rate arrangements. The bill is framed as a process-only change, but it would likely increase regulatory scrutiny and delay the implementation of special utility pricing or service terms for qualifying data centers.
No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or member sentiment in the available record. Based on the bill text alone, the measure appears aimed at transparency and oversight rather than restricting data center development, since it expressly says it does not prohibit service or expansion. The overall tone is regulatory and procedural, suggesting a neutral-to-cautious approach toward large-load utility arrangements.
The main point of potential contention is whether large data centers should be able to negotiate individualized utility rates and service terms without a contested-case proceeding. Supporters of the bill would likely emphasize public oversight, fairness to other ratepayers, and preventing off-the-record utility deals, while opponents may argue that the added process could slow investment, complicate utility negotiations, or reduce flexibility for attracting large industrial loads. Another possible issue is the 100-megawatt threshold and the aggregation rule for affiliated facilities, which could bring more projects under the bill’s requirements.