Wisconsin PSC rule change could hinder data center investment
The Wisconsin Public Service Commission (PSC) has implemented a new data center rate that requires developers to cover infrastructure costs. However, a last-minute change increased the financial security requirement from a BBB to an A- credit rating, which critics argue will discourage investment. This policy may hinder future data center development and job creation in Wisconsin by making it financially burdensome for many qualified companies.
Dale Kooyenga, president and CEO of the Metropolitan Milwaukee Association of Commerce (MMAC), praises the Public Service Commission (PSC) of Wisconsin for establishing a new data center rate that ensures developers cover the full cost of required energy infrastructure, preventing expenses from shifting to ratepayers. This approach is lauded as a model for other utilities.
However, Kooyenga criticizes a recent PSC amendment that raised the financial security requirement for large customers from a BBB to an A- credit rating, while also removing the utility's discretion to make exceptions. He argues that this stringent requirement forces many financially sound, investment-grade companies to tie up hundreds of millions of dollars in cash or letters of credit, capital that could otherwise fund construction, hiring, and apprenticeships.
Kooyenga warns that this technicality could deter data center investment and job growth in Wisconsin, making the state less competitive compared to others like Michigan, Minnesota, or Ohio. He urges the Commission to reconsider and adopt a graduated standard for financial assurances, allowing for a more flexible approach that still protects ratepayers while fostering economic development.