Microsoft-We Energies contract retains provision PSC struck down

Microsoft's recently signed 15-year electric service contract for its Mount Pleasant data center includes a provision previously rejected by the Wisconsin Public Service Commission (PSC). The agreement with We Energies mandates that power plants serving the data center must be located in eastern Wisconsin or Michigan's Upper Peninsula. This stipulation was struck down by the PSC in May, following criticism from ratepayer advocates and clean energy groups who argued it would limit Microsoft's access to more affordable wind power from the broader Midwest and Great Plains.

We Energies has stated its intent to adhere to the PSC's order, despite the conflicting language in the signed contract, and is working with the commission to rectify the discrepancy. The utility's holding company, WEC Energy Group, had previously argued that closer power plants within the American Transmission Company's (ATC) territory would reduce grid failure risks and simplify coordination. However, the PSC ultimately sided with groups like the Wisconsin Citizens Utility Board (CUB), which emphasized the benefits of lower-cost wind resources from neighboring states.

Microsoft had requested the PSC reopen the case to address "errors or inconsistencies," including this provision. After the PSC declined, Microsoft signed the contract on July 16. Both We Energies and the PSC confirm that the utility is legally bound by the commission's approved rules, allowing Microsoft to source power from outside the geographically restricted areas. The situation raises questions among observers about why an outdated contract was signed and how the discrepancy will be formally resolved. Microsoft is also looking to purchase electricity from the planned Red Oak Ridge Energy Center in Kenosha County, with We Energies seeking PSC approval to acquire the natural gas plant from developer Invenergy.