Where the Grid Fails First

There has been a wave of new project announcements recently and this week the patterns are clearer.

On February 19, Google announced a $500 million “Digital Port” in the Dominican Republic — the company’s first international AI exchange hub outside the United States and the first in Latin America, directly connected by submarine fiber to two AI centers in South Carolina and Virginia. Virginia has become a data center hub with the highest concentration of projects in the country. The Dominican Republic’s government declared it a high national priority, strengthening its position as a regional AI infrastructure hub. Construction begins this month.¹

On February 27, the U.S. Department of Energy granted a Presidential Permit for Project Hostos — a private investment of $2.5 billion to install a 500-megawatt high-voltage underwater power cable (HVDC) that will carry electricity from the Dominican Republic to Puerto Rico through the Mona Passage — an 80-mile strait between the two islands. When it comes online in 2031, it will power the equivalent of 600,000 Puerto Rican homes.2

On March 9, DOE greenlit $365 million for Puerto Rico’s electric grid: rooftop solar and battery storage to improve resilience.3

Read those three developments in sequence and a pattern emerges. The Dominican Republic is being positioned as the AI infrastructure gateway for the Western Hemisphere — Google’s fiber connects it directly to the US AI compute centers in Virginia and South Carolina that anchor the national buildout. Puerto Rico — a U.S. territory, just 80 miles away — is receiving resilience investment that could better support the installation of solar panels and batteries to survive the next storm. By 2031, Puerto Rico may be importing power to run whatever local load it can support, positioning the Dominican Republic as central infrastructure in the region.

Back on the U.S. mainland, another Google project became public.

On February 28, Van Buren Township’s Planning Commission in Michigan granted preliminary approval for a 1-gigawatt data center — the largest proposed in the state’s history. The developer was listed as Panattoni Development Company. The project name was “Project Cannoli.”

On March 17, Google confirmed it was behind Project Cannoli. The same day, Google and DTE Energy — the utility serving Detroit and much of southeast Michigan — announced a formal agreement: DTE would supply a mix of energy storage, renewable energy, and grid power to serve the campus. The inclusion of clean energy in that supply mix is notable. It reflects both Google’s stated sustainability commitments and an opportunity for DTE to meet growing demand while advancing its own energy transition. Managing load at this scale is a genuine challenge for any utility — and anchoring the response in clean energy is a meaningful signal.

The campus will use up to 3.6 million gallons of water per day. Van Buren Township sits within the Great Lakes watershed — one of the largest freshwater systems in the world, and a region not classified as water-stressed. Water usage at this scale still warrants transparency: where the water comes from, how much is returned to the system, and what monitoring will be in place. Those questions haven’t been publicly answered yet.

More than 1,500 residents signed a petition opposing the project before Google’s name was even publicly attached.4 It’s worth asking whether that response would have looked different with earlier disclosure — about the developer’s identity, the energy supply plan, the environmental impact, and what community benefits were being considered. Transparency at the front of a process doesn’t guarantee public support, but it changes the nature of the conversation.

Three days before Google went public, on March 14, Detroit City Council voted 6-2 for a resolution asking Mayor Sheffield to impose a two-year moratorium on data center permits in the city.5 Project Cannoli is in Van Buren Township — a separate municipality — so even if a moratorium were enacted, it is not clear it would apply directly to this project. What the vote does signal is that concern about data center development has spread well beyond any single site. That creates a window for stakeholder engagement: an opening for Google, DTE, and Michigan policymakers to get ahead of those concerns rather than respond to them.

When Google confirmed Project Cannoli, it announced a $10 million Energy Impact Fund, designed to “drive down monthly bills for Michigan communities.”6 That is a voluntary commitment, and it deserves to be recognized as one — a first step, rather than a final offer.

Greg Leroy at Good Jobs First has named this challenge precisely. Writing in Tech Policy Press, Leroy argues that no meaningful governance work can begin unless the underlying system has been reformed first. He calls the prerequisite “reform-benefits.” Without them — without binding cost allocation, without environmental standards at the permit gate, without mandatory transparency and job quality floors — a developer’s offer can be appropriately scrutinized and shaped as a community development program.7

Google’s Energy Impact Fund structure has not yet been publicly detailed. Now the community can direct its inquiries to understand how the benefit targets will be defined, who will govern the allocation, and how residents can engage. Those design questions are exactly what Michigan’s regulatory review process is built to surface and answer. Google agreed to that process. That matters.

Google also voluntarily committed to adding “clean, around-the-clock power directly to the grid” to support the campus. Google is one of the signatories of the Ratepayer Protection Pledge. That commitment, if honored, would matter for ratepayers in DTE’s territory. In the absence of regulatory frameworks, voluntary commitments are becoming the norm. However, the burden of oversight falls to utilities and state regulators to monitor. There are no binding payment obligations and no enforcement mechanisms if the clean power addition is delayed, reduced, or eliminated.

In parallel, Pennsylvania’s HB 1834 — passed by the House one week after Google’s announcement — would make these commitments binding by regulation.8 Michigan’s moratorium bills would pause the project until those rules are in place. Neither has cleared the finish line.

The gap in these processes is structural. Companies arrive at regulatory proceedings with legal teams, years of planning data, and detailed technical filings. Communities arrive with a petition. Closing that gap — through better disclosure requirements, independent technical support for community groups, and clear benefit standards — is what the reform-benefits argument is about. Last week I wrote about what that participation could look like in practice.

Van Buren Township is not Detroit. But it draws power from the same utility, and the grid upgrades required by Project Cannoli will flow through the same DTE rate base that serves Detroit’s historically underinvested neighborhoods.

Rebuttal testimony filed by Boratha Tan in Michigan Public Service Commission (MPSC) proceedings documented what that rate base looks like. In DTE’s service territory, formerly redlined Detroit neighborhoods get power through the utility’s older, lower-voltage distribution lines — operating at 4.8 kilovolts. Adjacent, predominantly white suburban areas are served by newer, higher-voltage 13.8-kilovolt lines. The difference matters practically: higher-voltage lines mean more reliable power, fewer outages, and — critically — more capacity to absorb locally-generated solar energy. The type of line serving your neighborhood determines whether you can even add rooftop solar.9

That disparity maps directly onto historical redlining boundaries. Those past decisions were not accidental. Inequity has been built in through decades of utility investment decisions that followed and reinforced residential segregation.10

The Interstate Renewable Energy Council (IREC) released an analysis of FirstEnergy’s Ohio territory and found the same pattern: disadvantaged communities were twice as likely to be served by older, lower-capacity lines, with fewer options to add local solar or battery storage.11 Another analysis by Gabriel Chan and Bhavin Pradhan of Xcel Energy’s Minnesota service territory found that customers in communities of color were three times as likely to face involuntary disconnection, and 47% more likely to lose power for more than half a day.12

Three states. Three utilities. Three independent analyses. The same underlying condition.

When Project Cannoli triggers grid upgrades in Wayne County, the current regulatory framework provides no mechanism to ensure those upgrades flow to the neighborhoods that have been waiting decades for them. The upgrade serves the new load. The legacy infrastructure in Detroit’s formerly redlined neighborhoods remains. DTE’s ratepayers — including those households and small businesses reliant on the 4.8kV system — absorb the cost.

The pattern in Wayne County is the same pattern in the Caribbean’s Mona Passage, and this time my ancestral homeland of Puerto Rico is in play.

Private capital went to the Dominican Republic because the conditions were right.

The Dominican Republic has favorable construction economics (25–30% lower costs than comparable Puerto Rico projects), a stable investment environment, a presidential administration actively courting AI infrastructure, and now Google’s Digital Port connecting it directly to the US data centers that define the AI buildout.

Puerto Rico has a fragile grid damaged by hurricanes under a contested private operator (LUMA Energy) and a utility authority (PREPA) that underfunded system operations by 70% between July 2024 and June 2025, leading to extended blackout periods. Puerto Rico also has a sovereignty movement that has grown to 43%. Yet there is no federal political resolution or clear path to independence. Meanwhile, the DOE investment is explicitly framed as resilience — surviving the next storm — rather than positioning for the next economy.13

Project Hostos, the submarine cable, is a private investment, not a federal program. It received a Presidential Permit from the Trump administration in February 2026 — reversing a Biden-era withdrawal — without a full environmental review. The power plant feeding the cable, in San Pedro de Macorís, Dominican Republic, will run on natural gas, creating a direct tension with Puerto Rico’s own law — Act 17 — which requires 100% renewable energy by 2050. How that tension is resolved will depend on Puerto Rico’s energy regulators.

The $365M solar and battery investment is real. But it is a resilience investment. It does not change the underlying calculus: the Dominican Republic is where AI infrastructure is being built. Puerto Rico becomes a customer.

The geography changes. The pattern doesn’t.

A conversation with Shay Banton, Regulatory Program Engineer at IREC, pointed to a set of principles that applies to both stories above. These are not aspirational goals. As a power systems engineer, Shay described minimum conditions for a more transparent and fair process to take shape.

First: utilities must share what they know. Detailed data on grid reliability, line capacity, how many projects are waiting to connect, and where investment has been deferred — this information exists inside every utility. Communities rarely get access to it in a usable form. Without it, Van Buren Township residents cannot assess whether the Project Cannoli grid upgrade addresses their existing reliability gap or routes new capacity around it. Without it, Puerto Rico’s advocates cannot evaluate whether Hostos power will reach the island’s underserved communities or flow primarily to the industrial corridor. Disclosure is not procedural. It is the foundation for informed participation.

Second: historic underinvestment must be part of the upgrade plan — not written off as a legacy problem. The older lines in Detroit’s formerly redlined neighborhoods exist because of investment decisions made and compounded over seventy years. When DTE files its grid upgrade plan for Project Cannoli, Michigan’s regulatory process is the legal moment to require that the plan maps existing reliability gaps and addresses them — not just the new capacity the data center needs. This is not charity. It is the principle that whoever causes a cost should be accountable for its full scope, including the infrastructure they are connecting to.

Third: local clean energy access should be required, not optional. Rooftop solar, battery storage, and small-scale power backup are not just clean energy tools — they are reliability tools. And they are systematically out of reach in communities where older distribution lines limit how much locally-generated power the grid can absorb. Any agreement connecting a large data center to the grid that does not include a local energy access requirement for affected low-income communities is, in practice, building a two-tier system: one side gets centralized infrastructure for new energy loads, while the other keeps absorbing reliability risk without access to tools to reduce it.

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Michigan MPSC contested case (Project Cannoli): Decision expected around September 2026. The Ecology Center, ELPC, and Vote Solar are the likely parties to formally intervene. Their filings will set the evidence standard for what the upgrade plan must address. Van Buren Township, west of Detroit and near Ann Arbor and adjacent to the City of Ypsilanti, Michigan, where a local moratorium was passed pending zoning and infrastructure developments. Ypsilanti has a poverty rate of 25%. It will use the moratorium period to evaluate its zoning and conduct an infrastructure assessment.

Michigan moratorium legislation (HB 5594-5596): Governor Whitmer’s office has opposed it. Detroit City Council’s 6-2 vote is pressure. A statewide pause before the MPSC process completes might fundamentally change the contested case leverage.

Pennsylvania HB 1834 in the Senate: Republicans hold 27 of 50 seats. The ratepayer protection provisions are the most bipartisan-friendly; clean energy and utility assistance provisions are more at risk. The Senate path determines whether the most comprehensive state data center framework in the country survives intact.

Puerto Rico Energy Bureau (PREB) on Hostos interconnection: Decisions about how power from the cable will be routed, what grid upgrades will follow, and whether local communities get clean energy access requirements have not been publicly set. This is the key negotiating window for Puerto Rican advocates — and it is not yet clearly open.

The DOE held public scoping meetings in February 2025 to gather environmental concerns about the Hostos cable, with specific focus on the Mona Passage’s marine biodiversity — over 270 fish species, coral reefs, and a humpback whale migration corridor. Then the agency withdrew the environmental review entirely in July 2025, eliminating further public comment procedures before the permit was approved. There is no public record of those scoping comments or how they were addressed. Puerto Rican environmental advocates may seek access to those scoping records as the PREB interconnection process moves forward.