Read the full stored bill text
KHS S06377'26_SB1047_INTR_1 cm96u7
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
June 18, 2026, Introduced by Senators MCMORROW, POLEHANKI, CHANG, CAMILLERI,
IRWIN, CAVANAGH, BAYER, HERTEL, SHINK and GEISS and referred to Committee on
Energy and Environment.
2
KHS S06377'26_SB1047_INTR_1 cm96u7
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 1
act that added this section, a covered utility shall submit a 2
tariff or contract for any new or expanding data center or other 3
large energy use facility to the commission or the covered 4
utility's governing board, as applicable. The commission or 5
governing board shall approve only a tariff or contract that does 6
all of the following: 7
(a) Requires that the data center or large energy use facility 8
enter into a contract with the utility for at least 20 years. 9
(b) Requires a minimum monthly billing charge for the data 10
center or large energy use facility that is based on not less than 11
90% of the facility's contracted demand and that applies regardless 12
of actual electricity consumption. 13
(c) If the data center or large energy use facility terminates 14
service with the utility, requires a fee to be charged to the data 15
center or large energy use facility equal to both of the following: 16
(i) Any remaining minimum billing demand. 17
(ii) Any unrecovered costs incurred by the utility to serve the 18
data center or large energy use facility, including, but not 19
limited to, generation, transmission, and distribution investments, 20
as determined by the commission. 21
3
KHS S06377'26_SB1047_INTR_1 cm96u7
(d) Requires collateral for the projected costs of providing 1
service to the data center or large energy use facility for the 2
full term of the contract equal to the amount of the fee under 3
subdivision (c). The collateral may be provided to the utility in 1 4
or both of the following forms: 5
(i) A standby irrevocable letter of credit for the full 6
collateral requirement. The letter of credit must be issued by a 7
United States bank or the United States branch of a foreign bank, 8
that is not affiliated with the data center or large energy use 9
facility or its guarantor, with a credit rating of at least A- from 10
S&P and A3 from Moody's. The security must be issued for a minimum 11
term of 360 days. The data center or large energy use facility must 12
renew or extend the security for additional consecutive terms of 13
360 days or more no later than 30 days before each expiration date 14
of the security. If the security is not renewed or extended as 15
required in this subparagraph, the utility may draw immediately on 16
the letter of credit and is entitled to hold the amounts drawn as 17
security. 18
(ii) Cash for the full collateral requirement. Cash collateral 19
must accrue interest at a rate approved by the commission and be 20
returned, in whole or in part, as the collateral requirement is 21
reduced or on satisfaction of all of the data center or large 22
energy use facility's contractual obligations. 23
(e) Ensures that the full revenue requirements for all current 24
and future costs caused by the data center or large energy use 25
facility are recovered from the facility and not existing 26
customers, including all generation, transmission, and distribution 27
costs caused by the facility, that are directly assigned to the 28
data center or large energy use facility through commission-29
4
KHS S06377'26_SB1047_INTR_1 cm96u7
approved accounting mechanisms in a contested case and subject to 1
periodic reconciliation. 2
(f) Contains terms that curtail the use of electricity 3
provided to the data center or large energy use facility from the 4
utility during an energy emergency event at the request of the 5
utility. 6
(g) Requires the data center or large energy use facility to 7
pay an application fee of at least $100,000.00 and enter the 8
applicable regional transmission organization's generation 9
interconnection queue for a new generation resource. Entering the 10
applicable regional transmission organization's interconnection 11
queue means compliance with all applicable interconnection 12
application requirements, including payment of the application fee, 13
disclosure of the technical requirements, payment of the definitive 14
planning phase studying funding deposit, demonstration of site 15
control, and payment of all other applicable per-megawatt fees or 16
deposits, as required by the regional transmission organization. 17
(h) Limits the offer of electricity service to a data center 18
or large energy use facility if offering that service would 19
adversely affect the reliability or affordability of electricity 20
service to other ratepayers in the utility's service area. The 21
commission shall determine whether this requirement is met in a 22
contested case where the utility has the burden to demonstrate 23
through quantitative analysis that the service will not increase 24
rates for other customers or reduce system reliability. 25
(i) Demonstrates that the data center or large energy use 26
facility participates in a demand response or interruptible load 27
program equal to at least 25% of the data center or large energy 28
use facility's maximum demand and that does not use fossil-fired 29
5
KHS S06377'26_SB1047_INTR_1 cm96u7
on-site or backup generation to provide any portion of the data 1
center or large energy use facility's demand response or 2
interruptible load capability. 3
(j) Requires the data center or other large energy use 4
facility to procure, from the utility or by other means, clean 5
energy equivalent to 90% of the data center or other large energy 6
use facility's forecasted electricity usage on an annual basis. A 7
data center or other large energy use facility taking service from 8
a utility that is subject to and pursuing compliance with the 9
requirements of section 51 of the clean and renewable energy and 10
energy waste reduction act, 2008 PA 295, MCL 460.1051, is not 11
sufficient to meet this requirement. As used in this subdivision, 12
"clean energy" means that term as defined in section 3 of the clean 13
and renewable energy and energy waste reduction act, 2008 PA 295, 14
MCL 460.1003. 15
(k) Requires the data center or other large energy use 16
facility to pay for any decommissioning costs of the data center or 17
large energy use facility through the use of a fund or other 18
comparable method. 19
(l) Includes any other requirements considered necessary by the 20
commission or governing board. 21
(2) As used in this section: 22
(a) "Covered utility" means any of the following: 23
(i) An electric utility. 24
(ii) A municipally owned electric utility. 25
(iii) A cooperative electric utility. 26
(b) "Data center" means a centralized facility used for the 27
management, storage, processing, and distribution of data with a 28
maximum aggregate demand of 20 megawatts or more at a single site 29
6
Final Page
KHS S06377'26_SB1047_INTR_1 cm96u7
or aggregated among more than 1 site in a utility's service 1
territory. 2
(c) "Large energy use facility" means a facility that has a 3
maximum aggregate demand of 20 megawatts or more. 4