State Regulators Change We Energies’ Data Center Rates to Protect Customers

The Public Service Commission of Wisconsin (PSC) has unanimously approved a first-of-its-kind special rate plan for data center-scale customers within We Energies' service territory. The decision, made on Friday, included significant modifications to We Energies' initial proposal, aimed at protecting existing residential and business customers from subsidizing the high energy costs of data centers. Commissioner Kristy Nieto emphasized that "Existing Wisconsin customers should not pay a single cent to subsidize the service of data centers. PSC Chair Summer Strand stated that denying the plan entirely would harm existing customers, as the approved plan provides protections that current large customer rates do not. The commission's modifications include extending data center agreements with utilities from 10 to 15 years to prevent cost-shifting, lowering the energy demand threshold for mandatory coverage by the plan from 500 megawatts to 100 megawatts, and removing a capacity-only subscription model deemed risky to non-data center customers. These changes were praised by various energy interest groups, including Clean Wisconsin and the Citizens Utility Board of Wisconsin, as responsive to public concerns about rising electricity costs and the impact of AI data centers. We Energies, which had applied for the special rates over a year ago to shield customers from data center-related costs, appreciated the approval. Spokesperson Brendan Conway noted the decision "ensures that no costs to serve data centers will be subsidized by, or shifted to, other customers." Microsoft, which is developing a data center campus in Mount Pleasant, also welcomed the approval, with Jeff Riles, Senior Director of Energy Markets, stating their commitment to paying the full costs required by their operations. A similar proposal from Alliant Energy regarding Meta's data center in Beaver Dam is expected to be decided later this spring.