Garrick Rochow: Thanks for your question David. A couple of things on this, I typically don’t like to talk about the pipeline just because it’s pretty speculative on that. And many of these data center companies are testing the waters in a variety of different utilities. And so we typically talk in terms of contracts. And when we talk about economic development whether it’s manufacturing or data centers, it’s secure contracts, which we again feel really good about. Let me reflect a little bit on this project and then I’ll talk, I will highlight the pipeline. I will get to your answer. This particular project this data center expansion that we mentioned in the prepared remarks is 230 megawatts online by 2025, a majority of the load in place by 2026.
And so that does speak to our ability and capabilities to be able to deliver for these customers. And then you see Michigan and I said this in some of my remarks tempered climate, which is great for the heating and cooling load of a data center, a lot of freshwater and then energy-ready sites attractive energy rates, good fiber network all that comes together to make Michigan really attractive. I will say within the state of Michigan there is a sales and use tax that exists where there’s roughly a dozen states that have the sales and use tax in place about 6%. There is an exemption process as being a build that are being considered in the House and Senate. It’s past the House in a bipartisan way. It’s moved over to the Senate for consideration.
We think that’s going to move forward that exemption probably in the June, July time frame at the end of the session before they go on summer break. And that will open up Michigan a bit more for that pipeline. There are companies that are exploring Michigan right now large data center providers, names that you would recognize. But again it’s a little bit they’re testing the water in a lot of different locations and so we’ll see how Michigan progresses. We’re certainly an attractive place to do business, and we’ll look to track that low growth appropriately. And but as I stated in my previous remarks, we want to make sure there’s a good balance that they’re picking up the costs associated with that load as well both from an energy and capacity perspective.
So that’s all the things that work in the balance David. Hopefully that provides some light to your question. Let me know if I didn’t strike the right balance there.
David Arcaro: It does. That’s helpful. Yeah. And are you thinking there could be upside to your long-term load growth expectations, or is it still early?
Garrick Rochow: We’ve got we have between the manufacturing load this contract and the data center load that’s contracted. As Rejji said, it’s a nice piece of load growth that we factored in the later years of this five-year plan but future five-year plans. And we’re excited about what that means. And there’s a strong pipeline both from a manufacturing perspective and to a degree the data center perspective as well. I’d be disappointed if some of those projects in the pipeline didn’t materialize.
David Arcaro: Okay, great. Thanks. That’s helpful. And a separate topic, I was wondering you’re just latest expectations for the performance-based rates process in terms of timing and where that outcome might be headed.
Garrick Rochow: That’s progressed in a constructive way. We had close to 10 or a dozen metrics that were originally proposed. It’s narrowed to four metrics that are benchmarkable and there’s good standards. And so again a constructive process plays out. There’s more work to do, from our perspective when we filed comments in the February March timeframe. We’re expecting a report from the Michigan Public Service Commission staff, in May. And so we’ll see the next round of thinking. I would suggest that a couple of electric rate cases away, not this case perhaps the next case before we see implementation. But again, this is an evolving process with the Public Service Commission.
David Arcaro: Okay. Great. Thanks for all the color.
Garrick Rochow: Yeah. Thank you, David.
Operator: Our next question today comes from Michael Sullivan from Wolfe. Your line is now open. Please proceed.
Michael Sullivan: Hey. Good morning.
Garrick Rochow: Hey. Good morning, Michael.
Michael Sullivan: Hey. Garrick, just sticking with the data center conversation it sounds like you’re kind of optimistic on this legislation and if that does pass and start to bring more interest to the state. What do you think about the potential for DIG being used in its entirety as like a behind meter solution for like a larger type data center build-out? I know there’s been a lot of focus on that on the nuclear side of things elsewhere, but people talking about gas as well, so, just curious of your thoughts there?
Garrick Rochow: Similar to Rejji’s comments from an energy perspective, energy tools and a capacity of the bilateral contracts, much of DIG has been spoken for, at attractive really attractive position that either meets our expectations or is above our expectations. And so there’s really unless you’re beyond 2028, maybe in the 2030s decade, DIG’s really not available, because it’s already been secured and with again attractive energy tools and bilateral contracts for capacity.
Michael Sullivan: Okay. Fair enough. Makes sense. And then just on your upcoming auditor case filing here just to set expectations, I know one of your peers in the state recently filed and got a pretty quick response from the AG. Are you anticipating something similar with yours? Should we just be prepped for that?
Garrick Rochow: It is. We got primaries in August. And that means early entity balance in June. And so it’s political season already in Michigan. And so I would anticipate that. Look, the Attorney General, participates in all our cases. That’s been a historical practice. Sometimes those are more public than other times. We stand as I shared earlier by the merits of the case both in our gas case, that’s underway right now and this electric rate case. The team just went through a walk through this week. And I couldn’t be more proud of the work the team is putting together on it. As I shared earlier in my questions or responses to questions, we’re focused on reliability. That’s going to improve for our customers. That is absolutely the right thing to do.
Well aligned with the Public Service Commission. We’re working hard to create affordability. And we’re good at that, through the CE Way, the reducing power supply cost, their unit costs from execution of capital. And when you get that mix right, that equation right, it makes it, I mean you get good outcomes. And so I’m excited about this case. It’s certainly going to be a step-up in capital. There’s going to be some O&M work too. That’s focused on reliability but there’s also some offsets that are really exciting that make us get me excited, as you can tell by the tone of my voice about what we’re filing and what we put it together, because it’s going to be good for customers. And it’s going to be good for all stakeholders.
Michael Sullivan: All right. Yeah. It sounds pretty strong. Sounds good. Thank you.
Operator: Our final question comes from Andrew Weisel from Scotiabank. Your line is now open. Please go ahead.
Andrew Weisel: Hey. Good morning, everybody.
Garrick Rochow: Hey. Good morning, Andrew. How are you doing?
Andrew Weisel: Follow-up on the rate cases here. Yeah. Thanks. Just a couple of follow-ups on the rate cases, so first, I think you just alluded to this to the electric side. You’re going to have more capital and more O&M. Just from a headline perspective should we expect a larger revenue increase request than what we’ve seen in past filings, in terms of percent increase to customer bills.
Garrick Rochow: Yeah. The short answer is, yes. But again, important work from a capital investment perspective and reliability and we’ve done a lot to offset some of the O&M costs components of this to strike that right balance. And that’s what I mean by the important fundamentals or merits of the case.
Andrew Weisel: Okay. Very good. And then procedurally on the gas side, I know this case is unique in that there’s no ALJ. Does that change the time line at all or the potential for settlement? You talked a bit about settlement but the lack of ALJs that factor in at all?
Garrick Rochow: No. The team seems excited about the opportunity to get to the table. Now, that we have staff position now that we know where interveners are at to talk settlement. And as I shared we’ve been able to navigate that with success in the past with all interveners all stakeholders. And so we’ll look to do that but also hear my confidence in the merits of the case that if we need to go to full distance we will. And I know that will get a good outcome for our customers and for stakeholders.
Andrew Weisel: All right. Sounds good. Appreciate all the update today.
Garrick Rochow: Yeah. Thank you, Andrew.
Operator: That concludes the Q&A portion of today’s call. I’ll now hand back over to Garrick.
Garrick Rochow: Thanks Drew. I’d like to thank you for joining us today. I look forward to seeing you on the road soon. Take care, and stay safe.
Operator: That concludes today’s call. Thank you for your participation. You may now disconnect your lines.
