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Pantsuits and Lawsuits with Attorneys General Kris Mayes and Dana Nessel
Pantsuits and Lawsuits is a no-holds-barred podcast featuring Michigan Attorney General Dana Nessel and Arizona Attorney General Kris Mayes as they break down the biggest legal and political battles shaping the nation. With sharp wit and deep expertise, these two trailblazing AGs will keep you informed on what’s happening in their offices, how they’re fighting to protect your rights, and what’s at stake in the courts. From democracy and civil rights to corporate accountability, they’ll tackle it all—bringing in expert guests along the way to dig even deeper. Smart, bold, and unapologetically candid—this is the legal commentary you didn’t know you needed.
Pantsuits and Lawsuits with Attorneys General Kris Mayes and Dana Nessel
Inside Data Centers: Who Pays, Who Profits, And Who Decides
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
A single hyperscale data center asking for 1.4 gigawatts can redraw the map of a state’s energy system—and your monthly bill. We unpack the real-world stakes of the AI buildout with a candid look at how utilities, regulators, and mega-customers strike deals that shape reliability, affordability, and community well-being for decades.
We walk through the mechanics of large-load growth: queue gaming that secures scarce capacity, special contracts that move behind redactions, and rate structures that can quietly shift costs from hyperscale users to households. You’ll hear why standardized large-load tariffs and hard collateral requirements matter, how transparency lets consumer advocates test utility claims, and what goes wrong when evidence is sealed. We also dig into utility incentives to build capital-intensive projects, the risk of “gold plating,” and the uncomfortable truth that regulated returns can persist even when performance lags.
The conversation turns to long-term risk. With 15 to 20-year deals on the table, rapid shifts in AI workloads, chips, and cooling could strand assets and leave communities paying for empty capacity. We outline practical guardrails: public dockets with accessible data, performance-based obligations, clawbacks on incentives, demand flexibility from data centers, and community benefits that outlast hype cycles. Along the way, we spotlight the role of state commissions versus attorneys general, why revolving doors and political money complicate decisions, and how to align tax incentives with real local gain.
If you care about fair rates, grid reliability, climate resilience, and the promises of AI, this is your roadmap to smarter policy. Subscribe, share with a friend who follows energy or tech policy, and leave a review with the guardrail you think should come first.
Setting The Stage: Data Centers
Arizona’s Grid And Regulators
SPEAKER_04Hi everybody, and welcome back to Pantsuits and Lawsuits, your favorite podcast to learn about the latest developments in American law. I'm your host today, Michigan Attorney General Dana Nussell, and today's episode is all about data centers. The infrastructure required to power AI and all the tools you might have noticed becoming more prominent in your workspace and in your life, and just fun videos that might be in your feed, whether you like it or not. We're excited for this episode to talk to some real experts and to sort of get to the bottom of what's happening as it pertains to data centers in our state. Karen, you are an environmental and energy specialist at uh the Arizona AG's office. And um, I'm sorry that uh your boss couldn't be here today, but we are delighted to have you on to you know explain some things about data centers and how they can be a strain on natural resources, drive up energy costs, which we know has certainly happened, um, and raises some legitimate sustainability concerns, especially for communities that are already facing affordability and climate pressures.
SPEAKER_01Yeah, certainly. And and thank you, A. G. Nessel. It's it's a pleasure to be with you uh today, and I'm just glad we could uh have this conversation.
SPEAKER_04Um so when you go back to um uh and talk to your boss, just say it was amazing how much funnier A. G. Nessel is than you are. And just see what her response is. Just see how it goes.
SPEAKER_01I'm sure, yeah, I'm sure she'll love that. So absolutely.
SPEAKER_04That's great. Um We're excited to talk about this topic because it's on everybody's mind right now. And if I could just let you know, we right now have nearly 20 data centers that are pending in communities around the state. Um, and it's a source of great concern. And I will say this one thing about it. This is very bipartisan in nature, this concern. This is not a Democratic concern, a Republican concern. This crosses the spectrum in ways that you rarely see with an issue. So, you know, tell us a little bit about what you're seeing in Arizona and what your views are from your work, just uh generally on a national scale as it pertains to data centers.
SPEAKER_02Yeah, so generally, so in my role, maybe I can start with so in the AG's office in Arizona, uh, I focus predominantly on, you know, energy, uh kind of the nexus between energy policy and energy law and how those things, you know, work with one another, especially as it relates to utility regulation, broadly focusing on what's happening um within the you know energy regulatory space at the state level, and that is predominantly through our version of the PUC. In Arizona, we have what's called a constitutional um uh utility commission called the Arizona Corporation Commission, which means the the authority of the commission is testify our constitution, and they have a plenary authority to do things such as rate making and energy policy and kind of a broad array of issues that maybe otherwise in other states you would have to go to the legislature to get approval on beforehand.
SPEAKER_04Um, if I'm not mistaken, that was um uh A.G. May's foray into the political sphere was working in this space, was it not?
Hyperscale Growth Meets Aging Grids
SPEAKER_02Exactly, yes. Um A. May's, you know, worked for a long time. She was the chairman of the Arizona Corporation Commission. She helped champion multiple, you know, priorities and issues at the time, everything from helping to make energy more affordable through access to energy efficiency and programs that helped to make homes more comfortable for customers, while also helping to kind of enable and jumpstart uh the renewable energy market. Both of those were huge successes, I think, in large part from uh then Chairman Mays, now of course AG Mays. So you kind of have these kind of key pressure points kind of converging at this moment where we're seeing this explosion in um new data center uh construction and requests for data centers. So ultimately, you know, there's in the last five years, there's been rapid growth of data center industries that have, and I think I would describe this as almost shining a light on problems that the electric grid has already been struggling with for many years. And, you know, we're having all these conversations now about, you know, halting retirement of assets that um uh are no longer no longer um useful, large-scale ancient fossil fuel um plants that are not helping to serve kind of the needs of customers today, and that don't have the flexibility that we need for the grid because what we're seeing now with energy usage over time, it's there's a lot of changes, there's a lot of variability, and that's just not in line with some of these older technologies, and it's not in line with the needs of customers today. It just happened to be that you know, prices were stable enough in the past that I think the uh the broad kind of uh you know, broad array of consumers across the country have not really noticed a change, but now they're noticing a change, right? And they're noticing it in a dramatic way.
SPEAKER_04You know, there's a lot of concerns. How are we going to keep the power, you know, on at all uh if we have these kinds of needs? Um I will tell you that we have just one data center uh in Michigan where it's believed that it would be the same for this 1.4 gigawatt data center as powering a million homes, and that's just been approved. Um, how can we sustain this with our current uh grid uh as we have it right now, and as you've indicated, is is aging rapidly?
Queue Gaming And Speculative Projects
Large-Load Tariffs And Collateral
SPEAKER_02Right. I mean, I think that's that's a that's the important question that everyone is talking about. And is what's happening right now is you have a lot of different um potential investors in data centers, maybe commercial uh real estate developers or brokers, or maybe even the you know cloud technology, um, you know, large hyperscale AI facilities themselves who want to get into the queue. And all of them are trying to essentially establish a place in line so that they can get a guaranteed electricity contract with the utility. And it's often a very low or minimal bar for um, you know, anyone who wants to get into this queue for them to overcome to get a spot. There's a lot of potential ways to gain the system so that they can get farther in the queue so they can get a guaranteed contract. Oftentimes, these are what we refer to as speculative um proposals that are coming in. And it's very challenging for utilities often to understand which contracts are legitimate or which proposals are real or not. So there's a couple of things that um, you know, some states have done as a part of like large load tariffs, for example. A large load tariff is specifically a um, let's call it a plan. All customers are on a utility rate plan. That's how they get service from their utility. And large customers, like large industrial customers, think that Amazon's, Googles, Metas of the World, they have to typically enroll in some type of rate plan in order to execute service with a utility. And there are certain requirements that are attached to these rate plans. So one thing is minimum requirements for payment. So this means that irrespective of how much power their facilities consume, they have to make certain upfront uh payments. Uh so what would you do?
SPEAKER_04Would you take, would you, I'm sorry to interrupt, but like, would you take that money and say you have to put X number of millions of dollars or even to the billions of dollars into escrow so that we know that if we are creating new infrastructure, specifically in order to power this massive data center, we know for sure that OpenAI or Oracle or Amazon or Microsoft is paying for it and it's not going to be left up to the ratepayers in order to shoulder that burden. Is that is that what you're saying? Exactly. That's referred to as a collateral requirement in a lot of these deals. Um one of the biggest issues. I'm sorry, I mean I just but do you have that in Arizona? Do you require that in Arizona?
SPEAKER_02So right now, that is something that's being proposed, and there's a lot of uh different types of agreements that are happening or you know, different recommendations, but a standardized process has not been solidified yet. And that was what I was gonna say as one of the number one things that states can do to help to curtail a potential disaster when it comes to energy affordability in their state, is have a dedicated process for these types of large industrial energy contracts to go through a tariff. Because one of the challenges is it is if you have these kind of secret deals where the price for power is being set with negotiators in a separate room and not in a public setting through a public utility commission, then you're running into issues of potential cost subsidization where maybe residential customers might be subsidizing these big data centers.
Transparency Versus Secret Contracts
SPEAKER_04So I'm trying to understand like the differences between Arizona and Michigan. In Michigan, what we're seeing are secret contracts. So that is that we are not having public hearings about this. We are having contracts that are heavily redacted, they get approved by our public service commission, and that the uh the public is never able to see, and that our department is never able to see. Is that allowed in Arizona or is it just in Michigan we're doing that?
SPEAKER_02Well, right now, I mean, that that's that's an issue we're looking at right now. Um uh, you know, we uh we requested our uh the Arizona Corporation Commission to vacate a decision it recently made on a uh soon-to-be data center facility. We asked them to vacate that order and we asked them to create a process where all large industrial uh users have to have some uh transparency. They have to have a public process where the rate of the electricity that they're uh they're gonna use has to be public and universally accessible. And that's the issue here, right? We're not saying don't power facilities, but do it in a way that's in public view. I think that's a commonality between Arizona and Michigan, where states that don't have a standardized process yet for these large lows, you're seeing potentially, potentially bad actors or people that see an opportunity to go to other states that maybe don't have a process up and running yet to maybe get guaranteed deals on the table.
SPEAKER_04So they're taking advantage of us because we haven't done enough to set the ground rules for how this is going to work. And so they're bursting into our states and trying to sort of, you know, run over everybody in getting these done as quickly as possible without us knowing what impact it's going to have on our states in the future. Would you agree with that?
SPEAKER_02I mean, I think there, I think there's a major risk there, right? And I think what we need to do is uh at the state level and even local governments too, right? Because there's there's an interplay here with things like, you know, the taxes that these facilities are going to provide or versus the incentives that maybe the state may provide for data centers. There needs to be a real conversation around how are we going to ensure that our citizens are actually getting something out of these deals to ensure that this is not a potentially like parasitic transaction, right? With that that's at the parasitic transaction.
SPEAKER_04I'm gonna write that down and I'm gonna use that over and over again, but I will give you no credit for it, Karen.
Reliability, Rates, And Regulator Roles
SPEAKER_02Okay, yeah. You know that you're just the messenger, right? I'm just the messenger. And and we want to do right, like the the goal of of this work for setting up right policies is to establish the the rules of the game that allow for uh facilities to come online, but in a way that is not going to create rolling brownouts or or issues with our grid reliability, is not going to exacerbate uh issues related to extreme heat or or weather natural disasters, it's not going to be at the expense of taxpayers and ratepayers, right? Because at the end of the day, ratepayers are taxpayers and vice versa.
SPEAKER_04Karen, what about my idea? I proposed this to A.G. Mays is that um uh in the winter, everyone from Michigan just goes to Arizona, moves there for several months. Then in the summer, all the Arizonians, Arizonians, Arizona ganders, uh come go from Arizona to Michigan, like problem solved practically, right?
SPEAKER_02Uh I mean, uh I I personally would would sign up for that exchange. I don't know if we could convince all the millions of people in Arizona, but uh, you know, dare to dream, right?
SPEAKER_04What's worse? To have it be negative 15 outside or to have it be 120? Like if you had to choose, which would you go with?
SPEAKER_02I would say this, you know, you can always put on more layers of clothing, but you can only uh, you know, remove so much and feel comfortable.
SPEAKER_04So Karen, what you're saying is Michigan is better than Arizona, is what I heard in that end response.
SPEAKER_02I didn't say that, but I'll say I uh uh I do. Thank you.
SPEAKER_04That's all the time we have. So we're gonna have to move on. But you know what, Karen, thank you so much for coming on the podcast and uh sharing uh your your thoughts with us. Um we really appreciate it, and um I hope we'll uh get to meet up again sometime soon. Hopefully me coming to Arizona in the near future. Uh you know, if it continues to be incredibly freezing here because um I just can't with this anymore. I'm too old.
SPEAKER_02But I understand. Thank you so much. Have a great day. Yeah.
SPEAKER_04Welcome to the podcast, Michael Moody, who is the division chief of uh the special litigation division at the Michigan Department of Attorney General. Uh and Mike, you've uh you've had that job since uh early 1900s approximately.
SPEAKER_001995.
SPEAKER_04Yes, 1995, you've been with the office. Uh and a lot of people wonder probably what special litigation is, but can you explain them to them a little bit about what you do at our department?
SPEAKER_00Sure. The special litigation division, so the name doesn't make it easy for people to know, does handle utility consumer advocacy. It's uh a name that we had way back in the Frank Carrie Frank Kelly era, and we've kept ever since. But yeah, we handle cases that are filed at the Public Service Commission. So I think your rate cases and stuff like that that affects your energy bills. We'll go on and on behalf of the Attorney General Data Nessel here, and we'll fight the rate increases or any other issues that are happening at the commission.
SPEAKER_04And let's talk about a little bit about the philosophy that we've had at the department, at least since 2019 when I came in. Um we get a lot of ratepayer requests from the utilities. What percentage of those do we fight?
SPEAKER_00Yeah, we we fight all the rate increases that have come in in the state of Michigan. So since you know you've taken office, we've made it a point to go after every rate increase and make sure that those are reasonable requests and that we cut them down when we see unreasonable requests.
SPEAKER_04Okay, well, and you you've done a fabulous job, as has uh our special lip division, of arguing these cases. But I I think what is so frustrating for me is that uh the vast majority of Michigan residents, even those people who try to, you know, really keep um updated on what's happening in the news, don't seem to understand uh who makes these decisions. So I frequently got get you know people, you know, well, mostly online, you know, shouting at me like, why did you let you know consumers get that rate increase? Or why did you let DTE get that rate increase? And it's hard because I want people to know like that is not a decision for us to make. We can be advocates for the public and for rate payers, but we don't make that decision. That decision is made by three people who sit on a commission, the Michigan Public Service Commission, all of whom are appointed by the governor in staggered terms. And, you know, I think it's important to get that message out that it's very much the same as if, you know, this was like the Court of Appeals or something. You know, we can argue our case and we can point to the evidence, we can put on witnesses and experts and talk about why a rate increase should or shouldn't happen. And if so, what we think is appropriate. But we don't ultimately make that decision. It's made by the commission.
SPEAKER_00That's correct. That's the some people don't understand that you're an advocate, not the decision maker.
Michigan’s AG On Rate Cases
SPEAKER_04And so that's exactly let's talk data centers. Uh Michael, which is I know something that uh, you know, you've had to deal with a lot in the last several months. Um, and it's something new, uh, or at least newer because data centers are very much different than they have been in the past, and they are now these giant bohemoth uh centers that um uh artificial intelligence companies are setting up for things like I don't know, making uh a fun video about your cat um that combines like a human and and a cat at once, or many other things, I suppose that you could do. But you know, it's really driving up the energy needs in our state. And I I wonder if you could speak to what you see happening.
SPEAKER_00This is the difficulty, again, because we're advocates, and you know, people talk about, like you said, oh, there's other data centers, and you know, that's not a problem. The magnitude of a hyperscale data center we're talking is unheard of. In my 30 years at this office, you know, you might have a Ford plant put in or you might have a smaller data center put in somewhere else, but never do you have uh a customer come to you and say, I need 1.4 gigawatts. Now, what does that mean?
SPEAKER_04Well, that's not your mother's data center, is what I'm hearing.
SPEAKER_00Yeah, yeah, yeah. That's right. Ten times the size of the largest customer currently. So it's huge.
Hyperscale Demand: 1.4 Gigawatts
SPEAKER_04Uh so uh one of the things that I think has upset us so much at the department is that over the course of these many uh decades and centuries that you've been working there, you know, generally speaking, you get to, when I say have a say, you get to read these contracts from the utilities in full. And even if there is a non-disclosure agreement where you say, okay, we're not going to release uh commercially sensitive information, at least you get an opportunity to read it and to digest it, to have experts look at it, and to be able to present that to the commission in a contested hearing, which is much like a trial, like a bench trial would be, for instance. But this situation where for data centers, they're allowing these uh redacted contracts and these ex parte hearings. Can you explain, like, what is that and why is that happening?
SPEAKER_00Sure. So the normal process that you would see is a utility would come in and file a request, say like a rate increase in a request. Everyone's familiar with that. They would come in and then parties such as yourself, other consumer advocates, uh, large companies, even individual customers can file and say, I'm interested and I want to participate. Then the commission says, All right, they set up a schedule, it gives us time to come in and ask questions to the utility, file testimony about our concerns, do cross-examination of the utility, you know, file briefs to the commission before they make a decision. That's the normal process of contested case hearing. And in that process, yes, there is sometimes confidential information, but the party signed a you know non-disclosure agreement. We all know. And we file things that are confidential to the commission, but all the parties get to see it kind of as normal. We always deal with this type of stuff. What's not normal is when they come to you and say, here's an application, you can't look at any of it, take our word for it, and you know, we don't want to hear from you. That's unheard of.
Ex Parte Contracts And Redactions
SPEAKER_04Yeah, and I should say, I mean, since the time I know that that I've been there, since the beginning of 2019, um, you know, we've saved ratepayers some four billion dollars or more in terms of requested increases by the utilities than you and your amazing team scour those filings. And oftentimes you find places where it's just totally inappropriate that the utility has thrown things in that they want the customer to pay for that we should never have to pay for. And I think one of the best examples of that, for instance, was you know, corporate jet travel. You know, it's not good enough for DTE to have their executives fly and coach. They have to charter their own jet, and we have to pay for it as the ratepayers. And so you've been very successful. And getting those knocked down so that the commission later on says, yeah, we're not going to approve, you know, rate increases for things like that. But with these secret contracts, I mean, we're not able to see that kind of stuff. So if there is stuff in there that is objectionable, we can't even make that argument.
SPEAKER_00That's right. Yeah. I mean, people need to know that utilities have a different set of incentives than a normal customer does. A utility's incentive is to build and buy things because that's how they make money. They make 10% on every dollar of building and buying. Hence, they seek out opportunities to do this. Our job as an advocate is to go in and say, is there a cheap way to do it? Like instead of buying that luxury car, how about this economical one? It does the same thing and achieves the same purpose, but a lot cheaper for customers. And so in a case like this, yeah, they'll come in and say things and we look it over and then we give our argument. We can't in the data center one. There could be all kinds of things in those contracts that we just don't know and could hurt.
Utility Incentives And Gold Plating
SPEAKER_04As I never tire of trying to tell people why it's done this way, you know, in this regulated process, is because these companies are monopolies. There is no competition for them. You know, you move into a certain house or or apartment or condo or what have you, and um, your your gas supplier, your electricity supplier, it's not up to you. It's already set by the location where you live. And so since we don't, we can't shop around and find the best um rate, this commission is supposed to do that for us to make sure that we're only paying what it is absolutely mandatory in order for, you know, literally the lights to be able to stay on and for these uh energy providers uh to be able to stay in business. But what I think people don't know is that these companies, under at least the, you know, the policies that have been established at this point, they get an automatic rate of uh of return or a rate on equity in terms of the profits they make, no matter how much they're charging or how poor their service is. Is that right?
SPEAKER_00Well, that's right. And it's been so frustrating because as you know, and the people in our state know, our electrical reliability is usually you know the bottom quartile in the nation. Yet we have some of the higher rates, at least in the region. And so you're wondering, wow, you know, who does that? Who gets to make unheard of profits with poor performance? That's usually not how it works in the business world.
SPEAKER_04So, what's the incentive of any of our utilities in Michigan? What's their the incentive for them to provide good service to us? If it doesn't matter, they get to make the same profit no matter how bad their service is.
SPEAKER_00It's tough. I mean, the commission is supposed to make that uh call. And, you know, we go in and make these arguments, and they would say, Oh, well, we want to balance our shareholders and our customers, but when your customers can't leave you, you know, who are they gonna favor? That's our concern. Is that they'll favor the shareholders over their customers because we can't leave. And and when they make decisions like these special contracts, we're always concerned. We didn't write the contract. Yep, we're responsible for whatever they write in that contract. And then the golf say you can't look at the contract.
Long Deals, Obsolescence, And Risk
SPEAKER_04So, Mike, here's um one of my big concerns, and that is that you know, we're hearing for these data centers that basically they'll pay for themselves as time goes on because their energy needs will be so great that you know the utilities will have to build out the infrastructure, it'll be better infrastructure, and uh as a result, it'll benefit all of us. Um, but my great concern is if that's supposed to happen over a number of years, and I'm not talking three years or five years or 10 years, in some of these cases, they're 19-year contracts. So my concern is what happens if these data centers become obsolete in a few years because the technology approves and improves. And I will say this I just read an article on how Elon Musk has this grand idea that he's gonna create these data centers that are gonna be in space. So we won't need to have data centers that are operated on the ground in Michigan because they'll be operating, you know, uh above our heads somewhere using solar power in space. So if that happens, let's say that technology became available in five years. What would happen to us in Michigan if we have this 19-year agreement, for instance, on a 1.4 gigawatt data center?
SPEAKER_00Right. All those hundreds of millions or billions of dollars that they've we've invested to, you know, build a distribution center, build the, you know, the uh hookups to it and everything else, and to procure the power, we call it, for this data center. All of a sudden, now you they don't need it anymore, or they go bankrupt. Maybe they can't compete anymore. Now you're left. What do I do with all this money? I I was going to recover the cost over time, like you're saying, but now they've left. So you've got to make sure you have a locked solid agreement that's going to lock those people in, and you need some kind of collateral that you can see. Because just because you have an agreement that says, yeah, so-and-so is gonna pay this kind of money if they leave, you don't have the collateral, that means nothing to you, then, right? Because the guy leaves.
SPEAKER_03Are these companies putting up collateral for these data centers here in Michigan now?
SPEAKER_00Not the DTE one that we're talking about here, it's a parent guarantee. Well, if the parent goes bankrupt, that's hardly a guarantee for us as customers who have to pay that cost. And then even if DTE says they'll backstop it, DTE can't afford billions of dollars, they would go bankrupt, and that would mean the customers have to bail them out.
SPEAKER_04I'll gladly pay you Tuesday for a hamburger today. Yeah, no one gets that because that's right, right?
SPEAKER_00I know that line.
Collateral Gaps And Who Pays
SPEAKER_04You do? Hooray! Someone knows one of my obsolete references from like the 70s. So essentially, um, that means if those firms go out of business, the AI tech firms, if they go out of business, um it's not gonna affect DTE's bottom line because they automatically get a certain profit anyway. And so to make up for the fact that those AI firms aren't gonna be paying for it, who will pay for it?
SPEAKER_00Yeah, so we saw something like this in the past where Consumers Energy, what was in the early 80s, late 70s, where they built a nuclear plant, a midland nuclear plant, or we're starting to build a nuclear plant, and then they got way over cost budget, and then you know, they had to shut it down because it they were you know gonna go bankrupt. And they pled their case to the commission. Advocates such as you know, Frank Kelly back then would said, Hey, you know, we never got any, you know, it's not used and useful, we call it. We never got any use out of it, we're not paying for it. This was just your fault, you know, overruns. Well, the commission said, Well, we can't let consumers energy go bankrupt. So it ends up we fund their negligence, essentially, or their you know, their inability to keep cost runs, you know, in. And then the same problems could happen with the data centers because the more and more you have data centers growing, the greater demand increases cost. So, you know, they may project that it's gonna cost as much to build that data center now and tell us, oh, right, there's affordability benefits. But if everyone's building data centers at the same time, there's a crunch on supply, which means labor costs go up, the cost to build it go up. So was it not factored in? We don't know. We can't ask those questions.
SPEAKER_04So what about the availability of chips? I hear that's an issue as well.
SPEAKER_00Yeah, right. I mean, it we've worked seen this before where the supply chain gets, you know, kind of crunched because of too many, you know, not enough to get in at a time, and all of a sudden the price tenfold up. We don't know.
Cost Overruns, Supply Chains, And Chips
SPEAKER_04Yeah. And um, as as we said, it's not as though it's going to be, you know, shouldered by the utilities, um, who again, like they, it's a no-lose proposition for them because they're gonna make their what 9.8% rate of uh return on equity anyway. Um, and ultimately, if it's not the ratepayers, it'll be the taxpayers because we'll have to bail out these companies because we can't let DTE or Consumers Energy go out of business because then who's gonna provide us our our energy? I want to mention this though, uh, about the um the commission. Again, three people appointed by the governor uh in staggered terms. And what I've seen historically is that you have people who sort of cycle from and then again to the utilities that they are regulating. So you might have somebody who worked at Consumers or worked at DTE um or were lobbyists for them or advocates for them or what have you. Then they get appointed to the commission, and then when their term is up, they go back to the utility and they're the ones who are making the decisions oftentimes for the rest of us. Has that not been the case for your many, many years that you have been serving in the Department of Attorney General?
SPEAKER_00Yeah, there, you know, some have, and I mean there are some protections. I think they have to wait six months uh under the statute, you know, once they leave the commission to then you know go to the utility if they want to, but you're right. I mean, that's a huge incentive, right?
SPEAKER_04Some people might call that a conflict of interest.
SPEAKER_00That's right. I mean, and that's why, you know, there are certain provisions in our statute that are supposed to protect against that, but it's always concerning, you know, they're they don't receive money from the utilities directly, but like you said, the legislators and stuff do, and and it's always concerning about what that impact will be when they write statutes.
Profits Despite Poor Service
SPEAKER_04Yeah, you know, I I do want to say this last thing that I think is concerning to me. And um uh, you know, I know that you've been in elected office as a as a Republican, and as you know, uh I am a Democrat, but uh for the Attorney General, it is not um a an office that is selected by the voters for the purposes of a primary. Uh, it is instead done by convention. So it's the Republican uh the Republican Party for Michigan, the Democratic um Party for Michigan making those selections at the convention. And I will say, just as a Democrat, you know, who are the heavy hitters at the convention? Well, it's the the trades, right? People who they're they're pipe fitters, they're iron workers, uh, they are, you know, carpenters. They're people who want to be able to go in and get these jobs and build as many data centers as possible. So they have a real incentive in supporting uh an attorney general candidate who wants these data centers, irrespective of whether it's a good deal for uh Michiganders in the future or not. Um and you you certainly have in the general, the in the general election, you have D DTE and Consumers Energy are two of the very biggest donors in any race. They can literally bury people who run for state house or state senate, or even if they're running for governor or AG, uh can have a tremendous amount uh of influence. Uh and then you, of course, you have the the you know AI companies, which now have gotten involved in politics. And we saw with uh President Trump, I mean, who were the people who were standing there at his inauguration who were multi-million dollar donors to him? You had Jeff Bezos and Mark Zuckerberg and Elon Musk, uh, and people who are very, very much involved in AI. They're involved politically now too. So you have all these bohemuts weighing in in support of building as many data centers as possible with as few restrictions or guidelines as possible. And who's left on the other side? Um, the ratepayers, right? And the just regular residents of states like ours who are gonna get stuck with the tab and maybe some really detrimental consequences of all these data centers, but we don't have the money or power or influence of all of those different groups put together. And to me, that is deeply concerning.
SPEAKER_00Yeah, I appreciate the, you know, of all the, you know, wait, wait, what five AGs I've been working through. I mean, you have been the most aggressive in these areas to protect people's pocketbooks on these utility rates. And so I appreciate it as a you know rate payer myself. And uh, you know, it's been it's hard because you have to go out and kind of fight against your right uh interests of some people, some you know, businesses or where people make money from what the utility is doing, obviously. And sometimes that could be cross-purposes with what you want to do and save money for customers and and they don't understand why we're there arguing these things, or like, hey, we you represent the people of the state of Michigan. So you're out there looking out with their pocketbook. And so that's the kind of arguments we're making at the commission. It's like, hey, we got to see that contract. We need to verify those claims, we need to make sure that you know the costs that you've included is not gold plating, as we call it, you know, and that it's reasonable and it's prudent. We're not saying you can't, you know, run the business and have a data center, like you've always said, it's we gotta make sure it's reasonable for the public. They gotta, it's gotta be affordable. I know you've said that a million times.
Revolving Doors And Influence
SPEAKER_04I just want to say, Mike, you know, you and your division and your team. Um uh when I when I came into office, I'm not gonna lie, I was a little bit suspect, you know, because you never know who you can trust on account of the deep state and all that. Um, and I knew I wanted to be really aggressive in terms of protecting ratepayers. I had read Frank Kelly's book and I knew how important it was to him, Frank Kelly, the people's lawyer. Uh, he does refer to himself in the third person a lot, but you get used to it. Um, but that being the case, you have been so phenomenal. Your team in our special lit division have been incredible. You have done so much to protect ratepayers in this state. And I just, I'm glad you get to be on a podcast where I can introduce you to the world, otherwise known as the 14 people who are going to listen to this. Uh, you know, so they understand like the face behind the office that's doing all this work to try to protect people in this state. So thank you, Michael Moody, from the bottom of my heart. Um, you know, I know we have another, whatever, 11 months uh almost to, you know, keep working together, but it it it I've just been so proud of the work that you've done and the work that our team has done, and proud of those who, you know, amazing uh attorneys and support staff that work at the Michigan Department of Attorney General. So thank you, Michael.
SPEAKER_00Thank you. I appreciate it.
SPEAKER_04Well, that's gonna do it for today's episode of pantsuits and lawsuits. AI is not really just some mystical concept in the future, it's part of our current reality, which means it deserves to be taken very seriously. Now we have the opportunity, while this industry is still in its infancy, to set out proper guardrails that will protect our communities from all the potential harm that's out there. But if we don't act now, we're gonna miss that window. So thanks for tuning in. You can learn more about the work of our department by following us on social media or visiting our website next time.