Case #2 in my data center series, Saline Township, MI. Part of My Case. The blank template is here.
The township said no. Then it got sued. Then it settled. That order is most of the story in this case.
I put Saline second because it shows why it matters who has leverage on the day the terms are written.
How to read this. Claims by companies, officials, and advocacy groups are labeled as claims. Where I could not find a number in the sources I opened, I wrote it down as an unknown and turned it into a question. Anything in a “My lean” column, and the conclusion, is my position on the evidence, and I am open to changing it. Facts are as reported through Oct 29, 2026.
The short version
The power side is tightly written: a 19-year contract, an 80% minimum bill, and a termination payment, imposed by the state regulator. The community side was settled in court after the township said no and was sued, and the township was then bound to approve a 12-year, 50% tax abatement. The open items are the Attorney General’s appeal over still-redacted contracts, the final value the abatement applies to, and the sales tax exemption the developer plans to use.
Key numbers
- 1,383 MW Contracted power (Regulator’s figure; about 1.4 GW. MLive says it is set to use more power than a million homes [1][5])
- 19 yrs / 80% Minimum term and minimum bill (Versus 5 years and 50 to 60% on DTE’s standard large-load rate [1])
- $4.8B to $43B Project value, then and now (Value at the 2025 settlement versus the figure used in July 2026 [3])
- 450+ Permanent jobs, company claim (Oracle’s figure; no wages or local-hire data published [7])
For the five-step test I use below, see the framework template. Most tables have a “My lean” column so you can see where my reasoning goes and argue with it.
The project
- What: A multi-building AI data center campus built by Related Digital for Oracle and OpenAI. Michigan’s first large-scale data center. About 2.2 million square feet [3][8].
- Where: Saline Township, Washtenaw County, Michigan, south of Ann Arbor. The township has about 2,375 residents and 856 households. The site is about 575 acres of former farmland, about 250 acres developed [2][10].
- Power: 1,383 MW under two special contracts with DTE Electric (a supply agreement and an energy storage agreement), held by Green Chile Ventures LLC, an Oracle subsidiary [1].
- Value: $4.8B at the October 2025 settlement, projected at more than $43B by July 2026. Related Digital says its early estimates were conservative and construction costs rose [3].
- Developer’s own filing: The tax-exemption form attached to the settlement lists $1.31B of real property and $3.5B of equipment, a total of $4.81B [2].
- How it got approved: The township board voted 4-1 on Sept 10, 2025 to deny rezoning. Related Digital sued two days later. A consent judgment entered Oct 15, 2025 rezoned the site and fixed the project’s terms [2][8].
- Who decides what: The township (zoning, tax abatement vote), the Michigan Public Service Commission (power contracts, not siting or water), the State Tax Commission (final abatement), EGLE (wastewater permit) [1][3][8].
- Status: Under construction since a June 1, 2026 groundbreaking. Abatement awaiting the State Tax Commission. Attorney General’s appeal pending in the Court of Appeals [3][5][6].
Step 1: Define the community
| Scale | What they get and what they carry | Who decides | My lean |
|---|---|---|---|
| Immediate neighbors (Saline Township, 856 households) | Noise, traffic, construction, a changed rural landscape, and well-water risk. The consent judgment gives them a 55 dB limit at property lines, a promise to pay to restore dry wells, and a seat on a construction advisory committee [2]. | The township board. After the settlement its discretion was largely gone: the judgment fixes the site plan, obliges the board to approve the tax abatement at the maximum exemption and term, and gives third parties no right to sue [2]. | No on how it was decided. Residents should have had the terms before the lawsuit. |
| Saline Township government | Gets a $2M community investment fund to spend at its discretion. Saline Area Fire Department gets $7M and two neighboring fire departments $0.5M each. These payments depend on approving the tax abatement [2]. Carries legal exposure if it breaks the judgment. Its attorney said the township could face billions in damages [3]. | Township board, under a court order. | Conditional. The township got real terms, but only after losing leverage. |
| Washtenaw County, Saline Area Schools, city of Saline | Share the property tax. Every taxing unit that levies on the property is affected by a 50% abatement, and how it divides among them has not been published. Oracle says the rest still yields about $147M a year to the county, schools and township (company claim) [3]. The city of Saline sits downstream on the Saline River from the proposed wastewater discharge [8]. | State Tax Commission has the final word on the abatement [3]. | Unknown. The split between the county, school district and township has not been published. |
| DTE Electric customers (Michigan) | Would pay if protections fail. The regulator made DTE responsible for any cost it cannot collect from the data center and ordered the data center’s load to be shed first in an emergency [1]. The Attorney General says DTE’s own filings admit a cost-of-service increase for some customers [6]. | Michigan Public Service Commission (ex parte approval, without a contested case) [1][6]. | Conditional yes. Needs the contracts to be public and tested. |
| State of Michigan | Forgoes sales and use tax on equipment. A Citizens Research Council estimate put the forgone revenue at $3.3B, which Related Digital called inaccurate without giving another number [5]. | Legislature and Michigan Strategic Fund. The developer plans to use the 2015 exemption, which has no public application and none of the 2024 law’s conditions [5]. | No, unless the 2024 safeguards apply. |
Step 2: Net-benefit test
Costs first. Each row says who carries it, what the record shows, and where the gap is.
| Cost | Who bears it | Evidence | My lean |
|---|---|---|---|
| Power system costs | The data center under the contract. Other DTE customers if the protections fail. | The Commission’s conditions: minimum 19 years, 80% minimum bill, termination payment of up to 10 years of minimum billing demand, DTE responsible for any unrecovered cost, data center load shed first in an emergency, and the data center paying over 15 years to build 1,383 MW of storage [1]. Contracts are heavily redacted, so the terms cannot be checked [6]. Collateral and exit terms are unknown. | Strong on paper. Publish the contracts. |
| Regulatory process | All DTE customers. | The Commission approved the contracts ex parte, refusing a contested case. The Attorney General’s appeal says DTE omitted or glossed over cost categories, left out transmission investment, and projected a rate increase for at least one customer category. That is an Attorney General claim, and the Court of Appeals has not ruled [6]. The Commission says its conditions mean no cost increase for others [1]. | A contested case is the right test. Let the court decide. |
| Clean energy and efficiency | Possibly all customers, through surcharges. | The Commission ordered DTE to analyze renewable standard and energy efficiency costs with and without this load and to keep surcharges from being collected evenly per meter [1]. Unknown – the actual surcharge. | Make the data center pay its own compliance costs. |
| Retail rates | DTE residential customers. | Unknown. DTE says customers will not see bill spikes (utility claim, reported by MLive) [5]. No published rate-impact study found. | Demand a rate-impact figure before and after. |
| Water | Neighboring well owners, the Saline River. | The consent judgment bars evaporative cooling, limits water use to domestic and similar uses, requires monitoring wells, and makes the developer pay to restore any neighboring well that goes dry [2]. Oracle says cooling uses a one-time-fill closed loop (company claim) [7]. The wastewater permit for sanitary sewage would let a facility run by the developer’s consultant discharge to the Saline River and self-monitor. The draft phosphorus limit is 0.2 mg/L against the permit biologist’s recommended 0.1 mg/L [8]. Unknown – annual water withdrawal. | Good on cooling. Hold the line on the river. |
| Noise | Neighbors. | A hard 55 dB limit at all property lines, with generator testing limited to daylight, once a week [2]. Unknown – who measures, and how violations are enforced. | Third-party monitoring, results posted. |
| Land and farmland | Township and farm community. | Rezoned from agricultural to industrial. About 200 acres preserved for agriculture and 47.5 acres under conservation easement. The township was deemed to approve ending a farmland (PA 116) agreement on one parcel. An existing solar easement on about 127 acres is terminated and solar farms are banned on the property [2]. | Fair trade for the acres. The solar ban is a real cost. |
| Tax abatement | Washtenaw County, schools, township. | A 12-year, 50% reduction on real and personal property tax. Oracle’s own figures: about $300M a year without abatement and $147M with it at a $43B valuation, so about $150M a year [3]. The board voted 5-0 on July 14 to apply it only to the original $4.8B value, then reversed days later after its attorney warned of a lawsuit for violating the consent judgment and state law [3][4]. The State Tax Commission still has to approve [3]. | The most contestable cost. Abatement should cap at the value the community agreed to. |
| State sales and use tax | State of Michigan. | Citizens Research Council: up to $3.3B forgone, disputed by the developer. The state has no data on the 2015 exemption’s first four years and keeps claimants confidential [5]. Michigan expects about $13B in sales and use tax this fiscal year [5]. | Public reporting, and cap it. |
| Abandonment | Township. | Demolish any building vacant for five years, with a surety bond of $5M to $10M, adjustable every two years [2]. Unknown – whether the bond covers a campus of this size. | Good term. Test the amount against the demolition estimate. |
Now the benefits.
| Benefit | Who gets it | Evidence | My lean |
|---|---|---|---|
| Property tax | County, schools, township. | Company claim: $147M a year with the abatement, about $300M without, at a $43B valuation [3]. Oracle also claims more than $200M a year in total taxes over about two decades and more than $1B of state tax revenue (company claims, MLive) [5]. Actual: the value has not been assessed, and the abatement is not final. No county, school or township split has been published. | The central benefit. Treat as unproven until assessed. |
| One-time payments in the settlement | Township and fire departments. | $4M farmland trust, $2M community fund, and $8M for three fire departments, $7M of it for Saline Area Fire Department. All are conditional on approval of the tax abatement [2]. | Small against the abatement. Paid regardless of how the abatement turns out is the better design. |
| Construction jobs | Regional building trades. | Oracle claims more than 2,500 union construction jobs and 1,500 more county-wide support jobs (company claim) [7]. Unknown – local share and wages. | Real, temporary. |
| Permanent jobs | Region. | Oracle claims more than 450 on site [7]. At 1,383 MW that is about 0.33 per MW, at the top of the USC benchmark of 0.15 to 0.35 for direct staff [11]. Unknown – wages and local hires. | Plausible. Ask for a binding number. |
| Grid fixed-cost contribution | Other DTE customers. | The Commission said the data center will contribute significantly to fixed costs, citing DTE’s calculation of a net benefit to other customers of about $300M [1]. Oracle’s page restates that as about $300M annually [7]. The Commission’s release does not say annually, and it is DTE’s own calculation. Unknown – the period. | Claim, not fact. Flag the difference. |
| Farmland trust and preservation | Township agriculture. | $4M fund for development rights and farmer support [2]. | Good, if the trust is independent. |
Back-of-envelope calculator
Swap in your own numbers to test any project. Defaults are Saline Township. Tax figures use Oracle’s own numbers, so they carry its assumptions. This is my arithmetic, not a forecast, and it assumes tax scales in proportion to value.
Inputs (defaults)
- Capacity (MW): 1383
- Load factor (%): 100
- Home use (kWh per year): 10500
- Project value ($ billion): 43
- Tax without abatement ($ million a year): 300
- Abatement (%): 50
- Value the abatement covers ($ billion): 43
What they give
- Annual energy: 12,115 GWh, about 1.15 million homes at the home use entered (the default is the Wisconsin Policy Forum’s 10,000 to 11,000 kWh figure [12])
- Implied tax rate on the project: 0.7% of value, from the company’s no-abatement figure
- Tax with the abatement: $150 million a year. Oracle’s own figure is $147M [3].
- Revenue given up each year: $150 million. Over 12 years: $1.8 billion. Set the covered value to 4.8 to see the capped case the board voted for on July 14.
- Permanent jobs, direct (benchmark): 207 to 484 (0.15 to 0.35 per MW) [11]. Company claim: 450 or more [7].
Step 3: Weight by need
| Indicator | What the data says | What it means for the weighting | My lean |
|---|---|---|---|
| Unemployment | Washtenaw County (Ann Arbor area) was 3.7% in September 2026 (not seasonally adjusted), against 4.8% for Michigan [9]. | Low need for jobs. | Jobs alone do not carry the case. |
| Household income | Median household income in Saline Township is $102,500, about 1.4 times the state’s, with 5% of residents below the poverty line [10]. | A well-off township. Not a distressed one. | The need is tax base for schools and services, not rescue. |
| Township scale | 856 households and about 913 housing units [10]. | A project this size dwarfs the community’s own budget. Even $14M of one-time payments is large to the township, small against the abatement. | Scale cuts both ways: more leverage for the county, more risk for the township. |
| Electricity affordability | Unknown. No published Michigan rate analysis tied to this load. | Raises the bar on cost shifting until proven. | Costs touching rates count extra. |
| Local opinion | The board voted 4-1 to deny rezoning. The Commission received written comments from thousands of people and held a December 3 hearing [1][8]. Unknown – no township poll found. | The elected board opposed the project before the lawsuit changed the terms. | Ask residents again after the contracts are public. |
Step 4: Opportunity cost
| Alternative | What the record shows | My lean |
|---|---|---|
| Keep farming | The site was 575 acres of agricultural land, including a farmland (PA 116) agreement on one parcel that the township was deemed to agree to end [2]. About 200 acres stay in agriculture. | The real baseline. A preserved-farm trust only partly offsets it. |
| Say no and defend the denial | The township did say no, 4-1, and was sued over exclusionary zoning. It settled within five weeks [2][8]. Unknown – how strong the developer’s case was. The township attorney later warned of billions in damages if the judgment were broken [3]. | A lesson about leverage, not about outcomes. |
| Solar on the same land | The settlement cancels a 127-acre solar easement and bans solar on the property [2]. | A foregone use. |
| Same power elsewhere | Unknown. No study of other sites or of other customers for the same 1.4 GW. The Commission ordered DTE to compare resource needs with and without this load [1]. | Ask for the comparison. |
| A smaller or phased campus | Unknown. The judgment bars expansion beyond the approved site plan, which is a real limit [2]. | The no-expansion clause is the best term in the judgment. |
Step 5: Leave AI out of it
Take away the word AI. A 1.4 GW industrial customer arrives on 250 acres of former farmland, with a developer that sued the township when it said no. Would you accept a 12-year, 50% tax break on a $43B factory because the developer promised a $2M park fund? The framework asks the same of every facility: who bears the cost, who gets the benefit, and who decided. The part that is unique to this case has nothing to do with AI. It is that the terms that now protect the township were agreed after a court order, not before it.
What other places do
| Tool | What it does | Does it reach Saline Township? |
|---|---|---|
| Special contract conditions | 19-year term, 80% minimum bill, termination payment, DTE absorbs unrecovered cost, load shed first [1]. | Yes. Already imposed, but the contracts are redacted. |
| Large-load tariff | The Commission told DTE to file a tariff for very large loads within 90 days of the December 2025 order [1]. | Unknown – I did not find the filing’s outcome. |
| Contested case | Lets the Attorney General and others test redacted contracts. The Attorney General is asking the court for one [6]. | Pending. |
| Claw back clause | The board added a claw-back provision to the abatement [3]. Unknown – its terms. | Yes. |
| Decommissioning bond | Demolition after five years of vacancy, secured by $5M to $10M [2]. | Yes. |
| 2024 enterprise exemption conditions | To get the state’s newer sales tax break, a company must apply to the Michigan Strategic Fund, procure clean energy, use a municipal water supply and avoid ratepayer subsidy. None had applied as of July [5]. | No. The developer plans to use the 2015 exemption. |
| Pay-for-performance and guaranteed value | Used in Wisconsin deals to tie payments to actual assessed value. | Not used here. The abatement follows whatever value results. |
Questions the public should demand answers to
- What do the unredacted DTE contracts say about collateral, exit fees and the rate for the data center, and will they be released?
- What does DTE’s own filing mean when it projects a cost-of-service increase for at least one customer category, as the Attorney General says?
- Is the roughly $300M benefit to other customers a one-time figure, a total, or annual, and who checked DTE’s calculation?
- What will the State Tax Commission decide on the abatement, and on what valuation?
- How do the county, Saline Area Schools and the township split the $147M a year Oracle projects, and how much does each lose to the 50% abatement?
- Why did the project’s value rise from $4.8B to $43B, and what was the value shown to the township when it settled?
- Will the developer apply for the 2024 enterprise sales tax exemption, with its clean energy, water and ratepayer conditions, or use the 2015 one?
- What are the annual water withdrawals, and what happens if neighboring wells drop?
- Who measures the 55 dB limit, and what happens when it is exceeded?
- Will the wastewater permit use the 0.1 mg/L phosphorus limit the permit biologist recommended rather than 0.2?
- What are the wages for the 450 permanent jobs, and how many go to Washtenaw County residents?
- What happened to DTE’s very large load tariff, and does it cover this project?
Where I land
This conclusion is my own position.
Saline Township is the case that shows why order matters. The township said no, got sued, and then signed. The power side ended up strong, because the state regulator did its job: 19 years, an 80% minimum bill, and termination payments. That is a fraction of the risk most ratepayers carry. But the people who live there got their terms after losing their leverage, and the tax abatement is still being fought, on a project value that grew from $4.8B to $43B. Oracle’s own numbers put the abatement at roughly $150M a year. Against that, a couple of million dollars for a park fund is not a benefit, it is a footnote. So I land at a conditional yes on the power deal and a no on the abatement as written. The question for any town is not whether you like AI. It is whether the protections are in the contract before the lawsuit, not after it. Here is the framework. Where does it break? Change my mind.
Sources
Numbers in brackets in the tables refer to this list.
- MPSC approves DTE Electric energy contracts for data center with conditions to strengthen protections for other customers. Michigan Public Service Commission, Dec 18, 2025. https://www.michigan.gov/mpsc/commission/news-releases/2025/12/18/mpsc-approves-dte-electric-energy-contracts-for-data-center
- Consent Judgment, RD Michigan Property Owner I LLC v. Saline Township (Case 2025-001577-CZ). Saline Township, Washtenaw County Circuit Court, Oct 15, 2025. https://salinetownship.org/wp-content/uploads/2026/09/SalineDataCenterConsentJudgmentFinalExecutionCopy492124804975v1.pdf
- Township near Ann Arbor approves much smaller tax break for $43B Oracle, OpenAI data center. MLive, Jul 15, 2026. https://www.mlive.com/news/ann-arbor/2026/07/township-near-ann-arbor-approves-much-smaller-tax-break-for-43b-oracle-openai-data-center.html
- Saline Township reverses vote to limit Oracle’s data center tax break. CBS Detroit, Jul 23, 2026. https://www.cbsnews.com/detroit/news/saline-township-reverses-vote-limit-oracles-data-center-tax-break/
- Data center tax breaks cost Michigan at least $13M but are shrouded in secrecy. MLive, Jul 12, 2026. https://www.mlive.com/news/2026/07/data-center-tax-breaks-cost-michigan-at-least-13m-but-are-shrouded-in-secrecy.html
- AG Nessel Briefs Appeal Over MPSC Approval of DTE’s Saline Data Center Contracts. Michigan Attorney General, Aug 7, 2026. https://www.michigan.gov/ag/news/press-releases/2026/08/07/ag-nessel-briefs-appeal-over-mpsc-approval-of-dte-saline-data-center-contracts
- Saline Township Data Center Facts. Oracle (company claims), Jan 2026. https://www.oracle.com/data-centers/saline-township/
- EGLE takes comments on wastewater permit for onsite water treatment at Saline Township data center. Michigan Advance, Oct 22, 2026. https://michiganadvance.com/2026/10/22/egle-takes-comments-on-wastewater-permit-for-onsite-water-treatment-at-saline-township-data-center/
- Michigan regional jobless rates fall during September. Michigan Department of Technology, Management and Budget, Oct 22, 2026. https://www.michigan.gov/mcda/labor-market-information/employment-situation-press-releases/2026/10/22/michigan-regional-jobless-rates-fall-during-september
- Saline township, Washtenaw County, MI profile. Census Reporter (ACS 2024 5-year). http://censusreporter.org/profiles/06000US2616171160-saline-township-washtenaw-county-mi/
- Data Center Employment Forecast Analysis. USC Zage Business of Energy Initiative, Dec 2025. https://hamminstitute.org/site-files/documents/data_center_workforce.pdf
- Grounding a Charged Debate: Data Centers in Wisconsin (household kWh figure). Wisconsin Policy Forum, Sept 2026. https://www.wpr.org/wp-content/uploads/2026/09/GroundingAChargedDebate_Full.pdf
Where this fits
Previous: Case #1, Mount Pleasant, WI. Next: Case #3, Prince William vs. Loudoun, VA. The full series starts at My Case.
Send me a project
If there is a data center near you that you want run through this test, reply to my post on X (@arietrouw) with the project name and location. I will pick some and publish them here.
Framework by Arie Trouw (@arietrouw). Licensed CC BY 4.0.