Will Wisconsin residents pay for data center power?

The Wisconsin Public Service Commission (PSC) is deliberating a significant energy rate proposal by We Energies that seeks to establish a distinct rate for hyperscale data centers under construction in counties like Racine and Ozaukee. We Energies argues this new rate is crucial to ensure data center companies pay their "fair share" for electricity, thereby preventing over $1.5 billion in additional costs from being passed on to other ratepayers. Under We Energies' plan, data center companies would be responsible for the full cost of their energy consumption, including the substantial investments in new power generation facilities required to serve them. This involves a mandatory 10-year service agreement, which automatically renews annually, with early termination penalties. However, PSC analysts have expressed reservations, suggesting the current proposal might not adequately prevent cost shifting if data center energy usage falls below projections or if agreements are terminated early. Concerns also extend to We Energies' plan to fund two new natural gas plants, with ratepayers expected to cover 25% of infrastructure costs and all annual fuel expenses. Analysts have recommended strengthening the 10-year service agreement to better secure long-term infrastructure cost accountability from data center operators. The PSC is expected to issue its ruling on the rate case by May 1. This comes after the commission previously approved approximately $2 billion in major transmission projects in 2025, specifically to connect hyperscale data centers to the state's power grid.