WeVote
Log In

Bill

Bill

SB 1047

Public utilities: rates; separate rate class for large-load customers; require. Amends 1939 PA 3 (MCL 460.1 - 460.11) by adding sec. 10ii.

2025-2026 Regular Session Introduced by Rosemary Bayer and 10 co-sponsors

The bill requires large electricity users (≥20 MW, including data centers) to enter 20-year contracts with minimum charges, collateral, and commitments to demand response and clean

SENATE CO-SPONSOR(S) NAMED: SEAN MCCANN
#publicutilities:rates
0
WeVote Research Nonpartisan
Bill Summary · SB 1047

Summary of SB 1047 (Michigan) – Public utilities: rates; separate rate class for large-load customers; require

Purpose and intent

SB 1047 proposes to add a new section (Sec. 10ii) to the Public Utilities Act (1939 PA 3) governing how certain large electricity consumers—specifically data centers and other facilities with high electricity demand—are integrated into utility planning, pricing, and service standards. The core aim appears to be to establish a framework for long-term contracts and financial guarantees, align utility cost recovery with the large facility’s costs, and ensure reliability and affordability for all ratepayers while addressing the needs and risks associated with large-energy-use customers.

Key provisions and changes

  • General coverage:

    • Applies to “covered utilities,” defined as electric utilities, municipally owned electric utilities, and cooperative electric utilities.
    • Applies to two categories of customers: data centers (maximum demand ≥ 20 MW at a single site or aggregated across sites) and other large energy use facilities (≥ 20 MW).

  • Tariff/contract requirements (within 180 days of enactment):

    • Utilities or governing boards must approve a tariff/contract for new or expanding data centers/large facilities that:
    • (a) Establish a minimum 20-year contract term.
    • (b) Impose a minimum monthly charge based on at least 90% of the facility’s contracted demand, regardless of actual usage.
    • (c) Impose a termination-related fee covering any remaining minimum demand and unrecovered utility costs (generation, transmission, distribution) attributable to the facility.
    • (d) Require collateral for projected costs for the full term (either a standby letter of credit meeting specified credit standards or cash collateral earning interest and redeemable as obligations are satisfied).
    • (e) Ensure full recovery of current and future costs caused by the facility, through approved accounting, in a manner that may be reconciled periodically.
    • (f) Include terms to curtail electricity use during energy emergencies at the utility’s request.
    • (g) Require an application fee of at least $100,000 and participation in the regional transmission organization’s interconnection queue, with all related fees and studies.
    • (h) Limit service offers if they would adversely affect reliability or affordability for other ratepayers; the commission assesses this in a contested case.
    • (i) Require participation in demand response/interruptible load programs equal to at least 25% of maximum demand, excluding on-site fossil-fueled generation for capacity.
    • (j) Require the facility to procure clean energy equal to 90% of forecasted annual usage (excluding some facilities subject to other state clean energy requirements); “clean energy” follows the state definition.
    • (k) Require funding for decommissioning costs via a dedicated fund or similar mechanism.
    • (l) Include any other commission/governing board requirements as appropriate.

  • Definitions:

    • Covered utility includes electric utilities, municipally owned electric utilities, and cooperative electric utilities.
    • Data center: centralized facility with ≥20 MW maximum demand at a single site or across multiple sites in the same utility territory.
    • Large energy use facility: facility with ≥20 MW maximum demand.

Who would be affected

  • Large electricity users meeting the data center/≥20 MW threshold.
  • Utilities serving these large customers, including investor-owned, municipal, and cooperative electric utilities.
  • Ratepayers generally, since cost recovery and reliability analyses are tied to these large facilities.
  • Regional transmission organizations (RTOs) and interconnection processes, due to required queue participation and related studies/fees.

Procedural and timeline aspects

  • Trigger: If enacted, a covered utility must file a tariff/contract for new/expanding data centers or large energy use facilities within 180 days.
  • Regulatory process: Approval would occur through either the commission or the utility’s governing board, with contested-case proceedings to evaluate reliability and rate impact for other customers.

Notable considerations

  • The bill imposes long-term financial commitments on large energy customers (20-year contracts) and significant collateral requirements.
  • It seeks to ensure full cost recovery by the utility for the large facility, potentially isolating these costs from other ratepayers.
  • It emphasizes grid reliability, energy affordability, and increased use of demand response, non-fossil energy sources, and decommissioning funding.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.