More data, more gas? Wisconsin power plant rules face scrutiny
Wisconsin's data center growth is increasing electricity demand, raising concerns among clean energy advocates that the state's utility business model incentivizes fossil fuel investments over cleaner alternatives. Advocates point to proposed natural gas plants by Invenergy and We Energies, arguing for a new system to ensure cost-effective clean energy choices and protect consumers from potential rate hikes.
Wisconsin's expanding data center sector is significantly boosting electricity demand, prompting clean energy advocates to scrutinize the state's utility business model. According to Lauren Reeg of Evergreen Collaborative, the current system, which guarantees returns on utility infrastructure investments, creates a financial incentive for companies to pursue costly fossil fuel projects rather than more affordable clean energy alternatives.
Invenergy, for example, is proposing two natural gas plants in Wisconsin with nearly 2 gigawatts of capacity, which We Energies intends to acquire. Utilities assert these projects are necessary for grid reliability amid rising electricity demand. However, Reeg argues for a revised system where utilities must comprehensively compare all energy options before constructing new power plants.
Concerns are compounded by efforts from federal lawmakers to ease pollution limits on power plants, potentially further encouraging new gas plant developments. A Union of Concerned Scientists report highlights how Wisconsin's rules allow plant approvals before a utility commits to purchasing power, potentially burdening customers with expenses if data center projects do not materialize. Advocates estimate data centers could account for up to 68% of Wisconsin's electricity demand growth by 2030, possibly leading to $30 billion in added electricity system costs over 25 years. While regulators have prevented utilities from directly passing data center costs to residential customers so far, Wisconsin's residential electric rates have increased by nearly 29% since 2021, and both We Energies and Wisconsin Public Service are seeking further double-digit rate hikes.