Wisconsin utilities seek federal pause on grid bidding amid AI-driven power demand

A coalition of electrical utilities, including Xcel Energy and American Transmission Company (ATC), has formally requested the Federal Energy Regulatory Commission (FERC) to temporarily suspend competitive bidding for major electricity transmission projects. The complaint, filed on Tuesday, argues that the current bidding process adds months to project timelines, hindering the country's ability to develop the necessary grid infrastructure to support the burgeoning demand from artificial intelligence (AI) data centers. The utilities contend that these delays pose national security risks and slow the expansion of access to cheaper electricity. National and statewide ratepayer advocacy groups, such as the Wisconsin Citizens Utility Board led by Executive Director Tom Content, have voiced strong opposition to the utilities' proposal. They assert that exempting transmission projects from competitive bidding would lead to inflated costs and higher electricity bills for consumers, likening the situation to "rate hikes well above the cost of living." Critics point to past instances where allowing local monopolies to control projects resulted in increased costs and argue that competitive bidding has successfully driven down prices and improved adherence to schedules. The debate has intensified amid a significant surge in data center development across the Midwest, exemplified by Meta's facility in Beaver Dam, Wisconsin, and Vantage's campus in Port Washington. The utilities argue that the rapid pace of this growth outstrips the grid's current expansion capabilities. As an example, they cited a recent MISO reversal where ATC was awarded substation projects in Fond du Lac, Ozaukee, and Sheboygan counties, despite a more expensive initial bid, because it could meet the urgent timeline for the Vantage data center. Conversely, opponents highlighted that even non-competitive projects, like ATC's Cardinal-Hickory Creek line, have faced prolonged delays and legal challenges. The utility coalition has proposed either case-by-case exemptions or a five-year suspension of competitive bidding, a period they believe is crucial for the nation's AI infrastructure development.