Regulators boost customer protections in We Energies data center rate

The Public Service Commission (PSC) of Wisconsin has approved We Energies' specialized electric rate for large data centers, but only after implementing substantial modifications aimed at strengthening customer protections. Approved on April 24, the novel plan mandates that large data center customers will bear the full cost of not only the electricity consumed but also the new power generation infrastructure developed to serve their high energy demands. Key changes introduced by the three-member PSC include ensuring existing We Energies customers are not charged for two proposed natural gas plants in Kenosha and Walworth counties, which total over $2 billion. Initially, We Energies had proposed that ratepayers cover 25% of these plants' capital costs. The commission also lowered the enrollment threshold for the new rate from 500 megawatts to 100 megawatts and extended the minimum service agreement term for data centers from 10 to 15 years, further safeguarding existing customers during data centers' ramp-up periods. Additionally, the PSC ordered We Energies to track and assign data center-related transmission costs directly to tech companies, particularly in light of American Transmission Company's (ATC) planned $2 billion in Wisconsin transmission projects, including those for Vantage's Port Washington campus. This regulatory decision comes as We Energies seeks to double its generation capacity by 2030, investing billions in new solar, wind, and natural gas projects to power facilities like Microsoft's $7 billion Mount Pleasant data center and Vantage's $15 billion Port Washington campus. Tech companies have reportedly pledged to cover all energy costs related to their data centers. Separately, We Energies has also applied for electric rate hikes in 2027 and 2028, attributing them to clean energy transition projects, a move that has drawn pushback from consumer advocates amid rising cost-of-living concerns.