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Michigan’s two major utility companies, Consumers Energy and DTE, filed a lawsuit last Thursday challenging Proposal 2, a recently approved ballot measure designed to restrict corporate money in politics. The utilities argue that the measure violates their First and 14th Amendment rights.
Proposal 2 Restrictions and Background
The ballot measure passed with 81 percent of the vote, amending campaign finance laws in Michigan to place strict limits on donations from utilities and companies holding more than $250,000 annually in state and local government contracts. The new rules explicitly prohibit political donations from utilities, contractors, high-level employees, lobbyists, and their immediate family members, while also tightening disclosure regulations for political ads and mailers.
Michigan experienced an election cycle where energy prices, government corruption, and data centers drove voter participation and the passage of reform measures. The state currently serves as a major hub for data center development, with at least 26 projects planned as of July. While utilities have supported this growth—with DTE proposing two new gas plants costing $6.4 billion to handle potential data center loads—consumers have faced a 10 percent increase in energy bills over the past 12 months, marking the fourth-largest increase in the US according to Energy Bill Lab.
David Pomerantz, director of the nonprofit utility watchdog Energy & Policy Institute, told WIRED that Michigan represents “ground zero right now for a utility accountability wave that is quite national.”
Arguments from Utilities and Legal Experts
In their lawsuit, the utilities contend that the ballot initiative was designed as “a means of excluding Plaintiffs from critical aspects of the political debate.” Consumers spokesperson Katie Carey stated in an email reported by WIRED that the proposal unfairly targets a Michigan business, its employees, and their families, preventing them from exercising constitutionally protected rights while allowing out-of-state special interest groups and billionaires to continue heavy political spending. DTE did not respond to WIRED’s request for comment.
Pomerantz noted that because state-level bodies regulate utilities either through elections or gubernatorial appointments, strong incentives exist for participation in pay-to-play schemes, citing corruption scandals in neighboring Illinois and Ohio. Conversely, the lawsuit filed by DTE and Consumers Energy asserts there is “no scandal, no exchange of official acts for money, no examples whatsoever.”
Daniel Weiner, director of the Elections and Government program at the Brennan Center for Justice, told WIRED that the new language positions Michigan among the states that more effectively regulate high-risk political giving. While the lawsuit claims the provisions go beyond the laws of any other state, Weiner pointed out that restricting donations from family members of government contractors, though unusual, exists in states like New Jersey, Connecticut, and New Mexico, while Georgia and Alabama restrict utility donations specifically.
“If you’re going to have an effective restriction on major state contractors pouring tons of money into campaigns, it cannot just be limited to the entity that holds the contract—that just creates an enormous loophole,” Weiner told WIRED.
Political Spending and Legal Defense
A 2023 analysis by Bridge Michigan revealed that organizations linked to the two utilities contributed more than $2 million to state politicians through political action committees (PACs). However, Pomerantz explained that much of their spending occurs through dark money distributed by affiliated outside groups. For instance, the DTE-linked 501(c)4 group Michigan Energy First received over $51 million in donations since 2014, including $8 million from DTE between September 2025 and August 2026, according to the Energy & Policy Institute. DTE has repeatedly denied connections to the group despite company executives staffing it.
The Detroit News reported that Michigan Energy First provided $550,000 to a group associated with Governor Gretchen Whitmer and $750,000 to state House Speaker Matt Hall in 2024 amid an influx of data center proposals and right before the Public Utilities Commission approved customer rate hikes. Total contributions from the group to the Whitmer-associated organization reached $1.8 million since 2020, though DTE told the outlet that any insinuation of expecting preferential treatment was “blatantly false.”
Prior to the vote, Michigan utilities spent just over $200,000 trying to defeat the measure.
Samuel Bagenstos, legal counsel for the groups behind the measure, told WIRED that they have full confidence in the legality of Proposal 2 and are prepared to vigorously defend the will of Michiganders who overwhelmingly approved the measure.
