The Wisconsin Department of Natural Resources and a group of environmental organizations announced a settlement agreement Monday that would require stricter environmental impact assessments of future data center developments and initiate a statewide review of how data centers use the state’s resources. 

In June, the Sierra Club and Midwest Environmental Advocates sued the DNR in Ozaukee County court, arguing that the agency approved the permits for Vantage’s massive data center currently under construction in Port Washington without conducting a proper environmental impact statement. 

“AI data centers are massive, thirsty, energy hogs and have popped up all over Wisconsin,” Elizabeth Ward, director of the Wisconsin chapter of the Sierra Club, said in a statement. “They could completely change our landscape and use unprecedented amounts of water and energy. Wisconsinites and our regulators need to understand the impacts and opportunities to reduce harm before allowing data centers to move forward. Wisconsinites deserve an informed, transparent process for decisions that could shape their communities and environment for decades.

A report this summer by the state Public Service Commission found that the Port Washington data center and data centers being built by Microsoft in Mount Pleasant and Meta in Beaver Dam are set to be responsible for a 40% increase in statewide energy demand over the next six years. 

As part of the settlement agreement in the lawsuit, the DNR will conduct full environmental impact statements of individual data center proposals moving forward and complete a statewide strategic analysis of how data centers consume resources. 

State law and the DNR’s administrative rules allow the agency to conduct such an analysis when conflicts arise over resource demands for a  “complicated or complex issue; an issue that is new to the state; an issue or policy that will likely lead to future department actions that will require an environmental impact statement; issues for which there is a high potential for legislation or new department policy and the planning and development of controversial resource-oriented projects.”

“What started as a lawsuit over the environmental review of one data center has become an opportunity to address the data center issue on a much bigger scale,” MEA attorney Michael Greif said. “Looking at these impacts holistically is important because the impacts of data centers are statewide. State regulators will now have to examine the cumulative impacts of data center development across Wisconsin.”

Wisconsin will become one of a few states assessing the statewide impacts of data centers on their resources. In July, New York Gov. Kathy Hochul signed an executive order that initiated a similar analysis and last December, the Maryland Legislature enacted a law that requires a number of state agencies to study “the likely environmental, energy, and economic impacts of data center development.”