DTE’s 2.1 GW gas plan tests Michigan’s 2040 clean-power law

By Grace Kim

DTE Electric estimates $6.4 billion for two proposed gas-fired plants totaling 2.1 gigawatts in the Detroit area. The plants would start in 2031 and 2032, and the company plans to add carbon capture by 2035.

The company filed the 20-year plan with the Michigan Public Service Commission in September. Regulators will study the proposal over the coming year.

What does DTE want to build?

DTE would close the roughly 50-year-old, 3-gigawatt Monroe coal plant under the proposal. It would add 15 gigawatts of renewables, mostly solar, and 4.5 gigawatts of energy storage.

The two gas plants would have 2.1 gigawatts of combined capacity in the Detroit area. One would sit in the same county as the coal plant. The gas build is more than double the 946 megawatts proposed in DTE’s 2022 plan to fill the coal-retirement gap.

DTE presents the plants as replacements for retiring coal capacity. Earthjustice instead points to data-center contracts worth a combined 2.4 gigawatts. The company signed those contracts with Oracle and Google.

The filing also identifies 2.4 gigawatts of new customer load since 2022. Earthjustice represented environmentalists in proceedings over the planned Google data center. “Just looking at the numbers, it’s hard not to draw that direct link,” said Helen Li, Earthjustice’s senior attorney.

Li says DTE should evaluate both the new gas spending and later carbon-capture costs before ratepayers commit. Both investments could reach billions.

Can carbon capture meet Michigan’s law?

Michigan’s 2008 clean-energy law, updated in 2023, requires utilities to generate 80% of power from clean sources by 2035. It requires 100% clean generation by 2040 and at least 60% renewable generation by 2035. Gas plants can count toward the clean share if they capture at least 90% of smokestack emissions.

DTE’s filing targets carbon-capture equipment by 2035, not at either proposed start date. That leaves compliance dependent on a system critics say has no successful U.S. utility-scale precedent. The filing would allow the plants to operate for at least three years before the 2035 target.

S&P Global describes carbon capture as mature and scalable for hard-to-abate sectors. Its report also says deployment remains at an early stage after more than 50 years. The firm cites cost, financial risk, market uncertainty, and difficult infrastructure construction and monitoring.

Most operating sites worldwide involve enhanced oil recovery. That process sends captured carbon dioxide into declining reservoirs to push out oil and earn additional revenue.

The Petra Nova project at a Texas coal plant is the only commercial U.S. power plant using carbon capture. It has endured a three-year shutdown and missed targets. Last year, the Environmental Protection Agency called extensive carbon-capture infrastructure deployment extremely unlikely by the Biden rule’s 2032 compliance date. E&E News reported that assessment.

Capture equipment consumes considerable electricity. That power must be clean if a plant seeks zero emissions.

The Michigan Environmental Council has intervened in DTE’s resource-plan proceeding. Its chief policy officer, Charlotte Jameson, said: “It’s incredibly expensive.” She says the smokestack system needs pipelines and sequestration infrastructure, a cost that can be understated.

DTE faces a difficult cost forecast for carbon capture and sequestration, so the $6.4 billion plant cost could rise. Jameson calls the proposal a huge, risky bet for ratepayers and Michigan.

Public opposition adds another constraint. Michigan lawmakers’ efforts to adopt a carbon-sequestration law drew public outcry. Neighboring states have faced similar resistance to plans for carbon dioxide pipelines and injection wells. Critics say the gas build relies on an uncertain compliance technology.

How do data centers change the case?

Utilities nationwide face rising power demand from data centers while retiring fossil generation and expanding clean resources. Experts and regulators have called on data centers to shift consumption away from peak periods. Flexible use can spare utilities capacity built for brief peaks.

On October 30, the Michigan attorney general asked the Public Service Commission to reexamine DTE’s Google data-center contract. The request cites the risk of unfair charges to ratepayers. That cost-allocation proceeding is separate from DTE’s resource-plan review. Advocates see the cases as linked and worry residents will finance new data-center loads.

Some advocates would block new data centers outright. Others argue their power needs can be met without higher emissions or carbon capture. Li says DTE should maximize renewables, storage, demand response, transmission, and other clean resources. She opposes defaulting to fossil generation for artificial-intelligence data-center demand.

What could weaken the 2040 deadline?

Jameson says Michigan’s law allows multiple deadline extensions for grid reliability, renewable-build feasibility, and other factors. Those off-ramps predate the data-center boom, she says. Rising load could weaken renewable and clean-energy standards until they become effectively meaningless.

Mark Templeton, director of the University of Chicago’s Abrams Environmental Law Clinic, has represented community groups in other DTE proceedings. He calls DTE’s 2022 plan critically important for establishing the schedule to close significant coal generation. The new plan carries similar importance for choosing the replacement. He calls continued gas generation better than coal, but offers little assurance it meets Michigan’s climate law.

The next milestone is the Public Service Commission’s decision over the coming year on DTE’s long-range plan. The attorney general’s October 30 request also seeks a separate review of the Google contract. DTE declined to comment and referred questions to its website. Regulators must decide whether ratepayers should finance $6.4 billion in gas generation before the carbon-capture path is proven.