LANSING, Mich. (WOWO)  — Michigan energy regulators on Thursday approved new standards for the booming data center industry, adopting rules designed to shield ratepayers from the enormous infrastructure costs tied to the facilities’ heavy energy demand.

In a 3–0 vote, the Michigan Public Service Commission approved a plan requiring large energy users — including data centers in Consumers Energy’s service territory — to sign long-term power contracts with steep penalties for exiting early. The order also directs Consumers to ensure data centers pay the full cost of new power lines, substations, and other equipment before connecting to the grid according to Bridge Michigan.

Commission Chair Dan Scripps called the move a “balanced approach,” saying it keeps Michigan open for business while protecting existing customers.

Environmental advocates applauded consumer protections but criticized the lack of renewable-energy requirements. Daniel Abrams of the Environmental Law and Policy Center said the commission “missed an opportunity to emphasize Michigan’s climate goals.”

The new rules arrive as utilities court several major data center developers lured by recent state tax breaks. Consumers Energy is negotiating three large projects totaling two gigawatts of power, while DTE Energy is pursuing its own deals — including a proposed 19-year contract for a massive Stargate data center in Saline Township.

DTE wants to fast-track that approval without a public hearing, prompting opposition from Michigan Attorney General Dana Nessel and environmental groups seeking more transparency.

Regulators say the surge in data center interest, driven by artificial intelligence and cloud computing, poses both economic opportunities and long-term infrastructure risks if projects fail or scale back.