Wisconsin regulators, Microsoft question utility plan for data center transmission costs
Microsoft, Wisconsin regulators, and customer advocates are expressing concerns over a utility proposal by American Transmission Co. and We Energies regarding data center transmission costs for a Microsoft facility in Mount Pleasant. They argue the proposed agreement may not adequately protect existing customers from cost shifting or fairly allocate expenses for grid upgrades. Federal regulators have been asked to review the proposal to ensure just and reasonable transmission rates for large power users.
Microsoft, the Public Service Commission of Wisconsin (PSC), and various customer advocacy groups are raising significant concerns regarding a utility proposal designed to manage transmission costs associated with data centers. The proposal, submitted to the Federal Energy Regulatory Commission (FERC) by American Transmission Co. (ATC) and We Energies, seeks approval for a transmission charge agreement specifically for Microsoft's data center in Mount Pleasant, Wisconsin. Critics contend that the current agreement might not adequately shield existing customers from the financial burden of extensive grid upgrades required to power these large-scale facilities, potentially leading to cost shifting.
Under the proposed deal, ATC would calculate a minimum transmission charge obligating We Energies to pay for the full requested capacity, even if Microsoft's data center uses less energy. Microsoft itself has filed with FERC, arguing the proposal contains "significant deficiencies" and may not be "just and reasonable," asserting it could lead to the company either underpaying or overpaying because the charge doesn't align with the actual cost of facilities built for its service. A Microsoft spokesperson emphasized the company's commitment to paying its required costs but demanded adjustments to ensure fair allocation.
Both the PSC and customer groups like the Citizens Utility Board of Wisconsin and the Wisconsin Industrial Energy Group echoed these concerns. While acknowledging the proposal as an "improvement upon the status quo," they collectively stressed the need for further work to establish "just and reasonable transmission rates" and prevent cost shifting to other customers. Tom Content, executive director of the Citizens Utility Board, highlighted the broad alignment among all customer groups, including Microsoft, in seeking greater transparency and certainty in cost allocation, advocating for broader rules rather than project-specific agreements for hyperscale data centers. ATC and We Energies maintain their commitment to customer protection and cost transparency.