Bill Text: MI SB1047 | 2025-2026 | 103rd Legislature | Introduced
Bill Title: Public utilities: rates; separate rate class for large-load customers; require. Amends 1939 PA 3 (MCL 460.1 - 460.11) by adding sec. 10ii.
Sponsorship: Partisan Bill (Democrat 11)
Status: (Introduced) 2026-07-01 - Senate Co-sponsor(s) Named: Sean Mccann [SB1047 Detail]
Download: Michigan-2025-SB1047-Introduced.html
SENATE BILL NO. 1047
A bill to amend 1939 PA 3, entitled
"An act to provide for the regulation and control of public and certain private utilities and other services affected with a public interest within this state; to provide for alternative energy suppliers and certain providers of electric vehicle charging services; to provide for licensing; to include municipally owned utilities and other providers of energy under certain provisions of this act; to create a public service commission and to prescribe and define its powers and duties; to abolish the Michigan public utilities commission and to confer the powers and duties vested by law on the public service commission; to provide for the powers and duties of certain state governmental officers and entities; to provide for the continuance, transfer, and completion of certain matters and proceedings; to abolish automatic adjustment clauses; to prohibit certain rate increases without notice and hearing; to qualify residential energy conservation programs permitted under state law for certain federal exemption; to create a fund; to encourage the utilization of resource recovery facilities; to prohibit certain acts and practices of providers of energy; to allow for the securitization of stranded costs; to reduce rates; to provide for appeals; to provide appropriations; to declare the effect and purpose of this act; to prescribe remedies and penalties; and to repeal acts and parts of acts,"
(MCL 460.1 to 460.11) by adding section 10ii.
the people of the state of michigan enact:
Sec. 10ii. (1) Not later than 180 days after the amendatory act that added this section, a covered utility shall submit a tariff or contract for any new or expanding data center or other large energy use facility to the commission or the covered utility's governing board, as applicable. The commission or governing board shall approve only a tariff or contract that does all of the following:
(a) Requires that the data center or large energy use facility enter into a contract with the utility for at least 20 years.
(b) Requires a minimum monthly billing charge for the data center or large energy use facility that is based on not less than 90% of the facility's contracted demand and that applies regardless of actual electricity consumption.
(c) If the data center or large energy use facility terminates service with the utility, requires a fee to be charged to the data center or large energy use facility equal to both of the following:
(i) Any remaining minimum billing demand.
(ii) Any unrecovered costs incurred by the utility to serve the data center or large energy use facility, including, but not limited to, generation, transmission, and distribution investments, as determined by the commission.
(d) Requires collateral for the projected costs of providing service to the data center or large energy use facility for the full term of the contract equal to the amount of the fee under subdivision (c). The collateral may be provided to the utility in 1 or both of the following forms:
(i) A standby irrevocable letter of credit for the full collateral requirement. The letter of credit must be issued by a United States bank or the United States branch of a foreign bank, that is not affiliated with the data center or large energy use facility or its guarantor, with a credit rating of at least A- from S&P and A3 from Moody's. The security must be issued for a minimum term of 360 days. The data center or large energy use facility must renew or extend the security for additional consecutive terms of 360 days or more no later than 30 days before each expiration date of the security. If the security is not renewed or extended as required in this subparagraph, the utility may draw immediately on the letter of credit and is entitled to hold the amounts drawn as security.
(ii) Cash for the full collateral requirement. Cash collateral must accrue interest at a rate approved by the commission and be returned, in whole or in part, as the collateral requirement is reduced or on satisfaction of all of the data center or large energy use facility's contractual obligations.
(e) Ensures that the full revenue requirements for all current and future costs caused by the data center or large energy use facility are recovered from the facility and not existing customers, including all generation, transmission, and distribution costs caused by the facility, that are directly assigned to the data center or large energy use facility through commission-approved accounting mechanisms in a contested case and subject to periodic reconciliation.
(f) Contains terms that curtail the use of electricity provided to the data center or large energy use facility from the utility during an energy emergency event at the request of the utility.
(g) Requires the data center or large energy use facility to pay an application fee of at least $100,000.00 and enter the applicable regional transmission organization's generation interconnection queue for a new generation resource. Entering the applicable regional transmission organization's interconnection queue means compliance with all applicable interconnection application requirements, including payment of the application fee, disclosure of the technical requirements, payment of the definitive planning phase studying funding deposit, demonstration of site control, and payment of all other applicable per-megawatt fees or deposits, as required by the regional transmission organization.
(h) Limits the offer of electricity service to a data center or large energy use facility if offering that service would adversely affect the reliability or affordability of electricity service to other ratepayers in the utility's service area. The commission shall determine whether this requirement is met in a contested case where the utility has the burden to demonstrate through quantitative analysis that the service will not increase rates for other customers or reduce system reliability.
(i) Demonstrates that the data center or large energy use facility participates in a demand response or interruptible load program equal to at least 25% of the data center or large energy use facility's maximum demand and that does not use fossil-fired on-site or backup generation to provide any portion of the data center or large energy use facility's demand response or interruptible load capability.
(j) Requires the data center or other large energy use facility to procure, from the utility or by other means, clean energy equivalent to 90% of the data center or other large energy use facility's forecasted electricity usage on an annual basis. A data center or other large energy use facility taking service from a utility that is subject to and pursuing compliance with the requirements of section 51 of the clean and renewable energy and energy waste reduction act, 2008 PA 295, MCL 460.1051, is not sufficient to meet this requirement. As used in this subdivision, "clean energy" means that term as defined in section 3 of the clean and renewable energy and energy waste reduction act, 2008 PA 295, MCL 460.1003.
(k) Requires the data center or other large energy use facility to pay for any decommissioning costs of the data center or large energy use facility through the use of a fund or other comparable method.
(l) Includes any other requirements considered necessary by the commission or governing board.
(2) As used in this section:
(a) "Covered utility" means any of the following:
(i) An electric utility.
(ii) A municipally owned electric utility.
(iii) A cooperative electric utility.
(b) "Data center" means a centralized facility used for the management, storage, processing, and distribution of data with a maximum aggregate demand of 20 megawatts or more at a single site or aggregated among more than 1 site in a utility's service territory.
(c) "Large energy use facility" means a facility that has a maximum aggregate demand of 20 megawatts or more.
