DTE Energy has signed a 1.4 GW agreement to serve a hyperscale data center and sees “transformational growth” ahead in a project pipeline that could represent up to an additional 7 GW of load.
It is the utility’s first hyperscaler agreement at a time when data centers are rapidly expanding around the United States. Large loads, including AI data centers, could ultimately add 20% to U.S. utilities’ peak demand, most within the next decade, Wood Mackenzie said in a September report.
DTE serves about 2.3 million customers in southeast Michigan, including Detroit.
“This is an exciting milestone,” DTE President and CEO Joi Harris said in a Thursday call with analysts. “Aside from the 1.4 GW of new load, we are still in late-stage negotiations with an additional 3 GW of data center load providing potential further upside to our capital plan as we advance these negotiations. ... And we have a pipeline of an additional 3-4 GW behind that.”
The data center contract of 1.4 GW increases DTE’s electric load by 25%, officials said.
“We also expect longer-term growth opportunities through the expansion of these initial hyperscaler projects,” Harris said. The generation investment needed to support the additional load “could very well come into the back end of our five-year plan, providing incremental capital investment.”
The utility has added about $6 billion to its five-year plan and now expects to invest $30 billion in generation, distribution and other infrastructure from 2026 to 2030.
“As a result of this first data center transaction and continued need to modernize our utility assets, our updated plan includes significant increases in utility investments for our customers and delivers 6% to 8% operating [earnings per share] growth through 2030,” Harris said. “We are confident we will reach the high end of our targeted range.”
DTE will use existing system capacity to support the data center ramp, but “we will also need to invest in new energy storage solutions to meet the full capacity requirements,” Harris said. DTE’s updated five-year spending plan includes nearly $2 billion of incremental energy storage investment and additional tolling agreements to support the data center, she said.
The utility shared some details of its initial data center deal. Load will ramp up over the next two to three years and the arrangement includes a 19-year power supply agreement with minimum monthly charges in place. The data center will pay for required storage through a 15-year energy storage contract, and the deal “supports affordability for existing customers as excess capacity is sold,” according to DTE’s earnings presentation.
“We plan to submit our regulatory filing tomorrow requesting approval of the data center contract,” Harris said. Energy storage investments will begin ramping in 2026 to align with the projected increase in data center load, she added.
The utility also said it will be submitting a competitive bid for its 2026 Integrated Resource Plan, including an all-source request for proposals for a new combined cycle gas plant to replace its retiring Monroe coal power plant. DTE expects generation additions from 2026 to 2032 that include 2.5 GW of batteries (including those at data centers), 8 GW of renewables and 1.5 GW of gas generation.
“A key step in preparing for the development of new generation to support large data center modes is integrating these requirements into our next IRP filing, which we expect to file next year,” Harris said.
