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Wisconsin regulators voted Thursday to send the American Transmission Company (ATC) back to the drawing board as the utility attempts to build the grid infrastructure needed to plug in the Port Washington data center. 

Public Service Commission (PSC) Chair Summer Strand called the move a “reasonable reset” after ATC repeatedly adjusted the project’s design, which commission staff and ratepayer advocates argued left both regulators and the public with a muddy picture of a grid expansion expected to cost well over $1 billion. 

ATC and its partners, however, warned the decision — likely the first of its kind for the century-old commission — could set a dangerous precedent that drives away investment in Wisconsin’s energy sector.

Data center connection at risk

ATC, which owns and operates transmission lines in the eastern half of Wisconsin, is on the hook to connect the soon-to-open Port Washington data center to the electrical grid. 

The company approached the PSC last September for permission to break ground on the project as early as this past May. Its initial application outlined a more than $1.3 billion infrastructure package, including a high-voltage transmission line and five new substations spread across Fond du Lac, Ozaukee, Sheboygan and Washington counties, needed to “reliably serve” the new data center by December 2027. After two months of back-and-forth over the “completeness” of ATC’s application, the commission took up the proposal in December 2025. 

ATC has since been vocal about the urgency of the infrastructure buildout needed to support the data center boom. The company is part of a coalition of utilities asking the Federal Energy Regulatory Commission (FERC) to speed up regional transmission projects needed to serve data centers by suspending competitive bidding, arguing that “bureaucratic red tape” presents a national security risk as the U.S. competes with China for “dominance” in the artificial intelligence race. 

Meanwhile, the utility has repeatedly adjusted its plans since December, redesigning proposed routes and adding a set of temporary bypass lines needed to avoid outages during construction. The PSC is responsible for reviewing those changes and giving other parties, namely ratepayer advocates and affected landowners, an opportunity to weigh in. 

Some commission staff sounded the alarm as the pile of revisions — and questions — grew.

“I don’t recall any other comparable cases in my experience with as many application material document revisions and ongoing design changes throughout the process,” PSC Environmental Affairs Coordinator Adam Ingwell wrote in testimony filed last month. “The sheer volume of documents and revisions, without adequate explanation, likely makes it more challenging than typical for a member of the public to find specific information about the project.”

Those concerns reached Administrative Law Judge Michael Newmark, who criticized ATC for creating an “unreasonable burden” on commission staff and the public by scattering “a plethora of changes, modifications and updates” across six months of filings. 

ATC, on the other hand, cast the revisions as “routine.”

“Every application develops during review,” the company’s attorneys wrote on Wednesday. “Changes far larger and later than ATC’s have never cast doubt” on whether an application should move forward, they added, citing a Barron County solar farm the PSC approved last March despite an “eleventh-hour” overhaul that included “relocating an entire substation.”

“There is simply no principled basis on which to treat ATC’s lesser and earlier changes more harshly,” the attorneys wrote. 

Ratepayer advocates weigh in

Ratepayer advocates generally avoid wading into fights over transmission line routes and substation siting, which Wisconsin Citizens Utility Board (CUB) Regulatory Affairs Director Corey Singletary described as a “zero-sum proposition” in which a victory for one group of landowners means shifting construction impacts onto another group of landowners.

But CUB raised concerns that ATC’s revisions make it difficult to forecast the project’s cost.

The route changes and new bypasses make the price tag “a moving target,” said CUB Executive Director Tom Content, as does the possibility that ATC still attempts to complete the project by December 2027. “Would they be paying double overtime or triple overtime to build it that quickly?” 

The Wisconsin Utility Association itself weighed in on Wednesday to warn the PSC that any additional delays in the project will “lead to increased costs for customers.”

Transmission utilities generally pass along the costs of new infrastructure to ratepayers of all kinds via their electrical bills; We Energies, for instance, estimates that transmission-related costs account for about 10% of customers’ bills. 

The PSC can’t require ATC to assign project costs to the companies developing the Port Washington data center. Only FERC, the five-person federal regulator that oversees interstate transmission, could overhaul billing rules to fully shield other customers from the costs of new lines and substations needed to serve data centers.

The commission offered an ad hoc solution this spring. The PSC’s May order creating a new billing structure for We Energies’ data center customers requires data center operators to pay a minimum transmission charge based on their projected electricity use. Wisconsin PSC Commissioner Kristi Nieto called the arrangement a “temporary stopgap measure” to protect other customers from the costs of overbuilt infrastructure if data centers use less electricity than anticipated. 

ATC and We Energies have since asked the PSC and FERC to approve a minimum transmission charge agreement with Microsoft, the operator of the vast new data center in Mount Pleasant. “This is a customer protection mechanism that follows the ‘cost causer, cost payer’ methodology,” an ATC spokesperson wrote in an email to Wisconsin Watch.

The utilities have not yet asked the commission to approve similar agreements with the companies developing the Port Washington facility: cloud computing giant Oracle, artificial intelligence firm OpenAI and data center developer Vantage.

In testimony filed last month, Singletary urged the commission to enforce “cost containment” measures for ATC’s project, including requiring the utility to cap its annual revenues from the new transmission lines. He also suggested that the commission push ATC to disclose any bids it receives for “work to be performed and equipment to be procured as part of this project,” which he argued would help keep an eye on the company’s efforts to rein in costs. 

‘Least-bad option’

All three commissioners aired matching frustrations during a Thursday afternoon hearing on ATC’s infrastructure plans before concurring on what Commissioner Marcus Hawkins called the “least-bad option” — requiring ATC to resubmit its application and restarting the case’s 180-day clock.

“There needs to be flexibility in the process,” said Nieto, “but there also has to be some point at which the changes become significant enough that we need to evaluate whether we are still reviewing the same project that was originally proposed.”

“This PSC is not opposed or hostile to data centers, construction, generation, (or) transmission,” Strand said, calling the decision “an unfortunate outcome.” Nevertheless, she added, “this application represents a cautionary tale of when unrealistic and unreasonable speed-to-power expectations collide with a deliberative regulatory process.”

ATC has not indicated when it will resubmit its application as of Thursday afternoon, nor whether the December 2027 deadline is still within reach. “ATC is disappointed with today’s Commission’s decision and is considering its options,” a company spokesperson wrote after the hearing. 

But the company’s final filing before the hearing signaled the possibility of a legal fight. “To date, the Commission has processed the application consistent with the law,” the company’s attorneys wrote. “At this stage,” restarting the process “would be the one action to depart from that.”

Wisconsin regulators send ATC back to the drawing board on data center connection project is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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We Energies reassured shareholders on Wednesday that Oracle’s ongoing dispute with state regulators over new credit rating requirements for data center operators poses no threat to the planned hyperscale data center in Port Washington. 

WEC Energy Group CEO Scott Lauber, head of We Energies’ parent company, told investors during a quarterly earnings call that the Port Washington facility remains on track to come online as soon as late 2027. In a “worst-case scenario” in which Oracle backs out of the project, “there are a lot of opportunities for that site,” Lauber said, “but at this point, I have no indication that’s the case.”

Wisconsin’s Public Service Commission (PSC) in April approved a rate structure for We Energies’ “very large customers” that requires operators like Oracle to pay for the construction of new power plants needed to meet data center energy needs. But constructing a new plant can cost hundreds of millions of dollars, and any unpaid debts tied to the plants could fall on We Energies’ other customers if a data center operator becomes insolvent.

To shield ratepayers from a potential cost shift, the PSC set a AAA- credit rating threshold for data center operators seeking electric service from We Energies. Companies below the threshold must post steep collateral, either in cash or lines of credit, as a backstop.

That requirement could cost Oracle, the co-developer of the Port Washington data center campus alongside OpenAI and Vantage, over $100 million per year in financial security payments. The company held a BBB credit rating when the PSC approved the credit rating standards, largely because of its aggressive borrowing to finance artificial intelligence ventures and risky business relationship with OpenAI. S&P Global Ratings, one of the “Big Three” credit rating agencies responsible for assessing creditworthiness of government and corporate debt, lowered Oracle’s rating to a BBB- on July 9 — the bottom edge of the agency’s “investment-grade” tier. If the company’s credit rating falls further, Lauber said, “we already have all the collateral we need.”

We Energies asked the PSC to reconsider the rule last month, arguing that the added cost could dissuade other companies from operating in Wisconsin. “If the Commission does not reopen its decision on this issue, the implications for Wisconsin would be significant and limit the ability of numerous investment-grade companies to invest in Wisconsin,” the utility’s attorneys wrote in their request. The PSC declined We Energies’ request earlier this month.

Lauber sounded more optimistic about the credit rating requirements on Wednesday. “I don’t think the collateral will be an issue long term,” he said, noting that ratings agencies reacted positively to the credit rating threshold. 

We Energies is currently in talks with at least two other data center operators interested in setting up Wisconsin operations, albeit at far smaller scales than Oracle or Microsoft, which operates a new data center campus in Mount Pleasant. Lauber told shareholders that the credit rating requirements pose no obstacle to those prospective customers. 

Oracle, however, sued the PSC in Ozaukee County Circuit Court last month, asking a judge to “set aside, reverse and remand” the credit rating requirements. The tech giant argues the commission acted outside of its authority in approving the rule and that the AAA- bar isn’t “needed to prevent harm” to We Energies’ other customers.

We Energies is an interested party in that lawsuit, but it did not join Oracle as a plaintiff.

We Energies says Oracle dispute won’t derail Port Washington data center is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Whether artificial intelligence data centers are essential to modern life, an existential threat or something in between, one impact is clear:

As they pave over homes and farmland, they are minting millionaires — and even generation-changing wealth.

In Wisconsin, the clearest example is in Port Washington, a city of 13,000 north of Milwaukee where a 672-acre data center is under construction. 

Some land deals were eye-popping, according to public records analyzed by Wisconsin Watch:

• Members of the Karrels family and their family farming business earned at least $20 million. The largest sale was $10.2 million for 173 acres, or $59,000 per acre, 17 times the fair market value of $590,000.

• Members of the Schlenvogt family, which has a long history in local government, sold properties for well above fair market value. Bonnie Schlenvogt sold her Lake Drive home and 65 acres for $3.44 million, nearly eight times the fair market value of $437,000. Her daughter-in-law, former Town of Port Washington Clerk Jennifer Schlenvogt, sold her nearly 3,000-square-foot Lake Drive home for $1.87 million, more than four times the fair market value. 

• A couple in their 60s, Peter and Ellie Burmesch, sold their 2,000-square-foot Tudor Revival on five acres for $2.13 million — seven times the estimated fair market value. 

• An adult group home with a fair market value of $320,700 sold for $6.5 million. Part of the deal involves relocating the facility. 

Those sellers declined to comment. 

Mayor Ted Neitzke, the data center’s most prominent supporter, said sellers fear being targeted by facility opponents.

“There’s a vocal minority that’s decided it needs to be louder,” he said. “That’s uncomfortable for (sellers) and they’re just not going to engage in it.”

Neitzke said the sellers are humble and not looking for publicity.

“They woke up one day and they just happened to live in the right spot.”

Port different from other data centers

Nationally, data center developers are willing to overpay for land near electric power and to beat competitors in what has turned into a land rush.

In Wisconsin, besides the Vantage-Oracle-Open AI $15 billion project in Port Washington, Microsoft is building a $20 billion data center in Mount Pleasant and Meta is building a $1 billion facility in Beaver Dam.

In Mount Pleasant, 25 miles south of Milwaukee in Racine County, most of the land had already been purchased by the village for a project launched by Foxconn that never fully developed. Racine County property sales records suggest Microsoft spent roughly $260 million on land alone. 

In Beaver Dam, 40 miles northeast of Madison in Dodge County, the data center is located on 520 acres that were previously part of the Alliant Energy Commerce Park. Meta paid roughly at least $10.4 million for the land. Dodge County property sale records indicate that the tech giant purchased at least another 226 acres in Beaver Dam and neighboring Trenton from private landowners.

In Port Washington, on Lake Michigan’s shore in Ozaukee County, developers made big purchases from individuals. County property sale records show developers spent at least $125 million acquiring 1,500 acres of land or more.

Unhappy sellers

The windfall might have been welcomed by some sellers in Port Washington, but not others.

Ryan Nowak sold his 65-acre Lake Drive property for $1.75 million — over $1.3 million more than fair market value. But now, living on a 1.5-acre property about 10 miles north of Port Washington, he regrets it.

Nowak recalled that, before hiring an attorney, he signed documents that he said prevented him from discussing sale offers with his neighbors.

“On paper it looked OK, until you go to replace what you had,” Nowak said. “I don’t even have a fraction of what I had and it’s not like I have a ton more money left over or anything. I don’t know. I upgraded. What I have now is nicer, but it’s a fraction of the size of a property and buildings and everything else.”

Curtiss Smith also said there are misconceptions about his new wealth.

“People that weren’t part of it, they’re like, ‘Oh, now you’re a millionaire,’” he said. “Far from it.”

Smith, a 53-year-old crane operator, remembers the developer’s agent telling him his property would sell for three times the value of his four-acre property. 

Sure enough, the property with a fair market value of $258,000 sold last August for $895,000.

The transaction left Smith appreciative but, having negotiated the deal alone, feeling some of his neighbors did better.

“After the fact, you hear what everybody else got,” he said. “You’re like, what the heck? Why did I sign so early, you know?”

Smith said the data center would have practically been in his backyard had he not sold. But, having bought a farmhouse a mile away, he still sees the data center every day. 

Residents like Amanda Mueller — who live near the data center, but not close enough to get a purchase offer — are unhappy, too. They worry whether the project will cause environmental problems and bleed their property values.

“For all the people that moved here, for the tranquil beauty, the silence,” Mueller lamented. “It just seems so absurd now to look back at it and go, ‘Oh, God, if only we had a crystal ball. If only we knew.’

“I don’t think this town is ready for the culture change that’s going to happen,” she said. “So we’re looking at the future that’s really uncertain. And unfortunately, we’re trapped in the shadow of this thing.”

In a Wisconsin land rush, data centers made them millionaires is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

A pair of environmental groups filed a lawsuit Friday in Ozaukee County Circuit Court alleging that the Wisconsin Department of Natural Resources skipped a required environmental review process at the request of the company that is building a massive data center in Port Washington. 

The lawsuit, filed by Midwest Environmental Advocates on behalf of the Sierra Club, alleges that the DNR backed off from requiring an environmental impact statement  after the company, Vantage, said it would “kill the project.” 

Communications between data center representatives and DNR staff, obtained by the groups through open records requests, showed Vantage complaining about the EIS requirement. The DNR ultimately conducted a more limited environmental analysis summary. 

Vantage, Oracle and OpenAI are currently constructing a $15 billion hyperscale data center in the community. The data center will cover 672 acres and in its first phase require 1.3 gigawatts of power. 

In the lawsuit, the groups argue that by not conducting the full environmental impact statement, the DNR ignored the potential impacts of the construction and operation of the massive data center on the local wetlands, water supply, air quality and energy demand. The lawsuit states that failing to conduct the full review before granting permits for the data center violates Wisconsin’s Environmental Policy Act.
“The Port Washington data center is unlike anything Wisconsin has seen before,” Elizabeth Ward, director of the Sierra Club’s Wisconsin chapter, said. “It will completely transform the local landscape, consume staggering amounts of electricity and water and significantly increase fossil fuel emissions. At a time when scientists warn that greenhouse gas emissions must be reduced to avoid the worst impacts of climate change, we cannot afford to be making long-term decisions that move us in exactly the opposite direction.”

The DNR permitting is not the only legal dispute the project is currently facing. Earlier this year, the state’s Public Service Commission instituted a tariff that outlines how data center companies must pay for the required energy use and compels them to put up a large amount of collateral for necessary infrastructure improvements. The tariff is designed to insulate regular Wisconsinites from seeing their energy bills increase or being left to cover the costs of massive upgrades to the grid if a company fails or abandons the project. 

Oracle has argued it doesn’t have enough funds to meet the collateral requirements and appealed to the PSC to reconsider. This week, the PSC declined that appeal, setting up a legal battle over the tariff. 

A DNR spokesperson said the agency couldn’t comment on active litigation.

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A $458 million tax incremental financing district the city of Port Washington approved in November 2025 for a massive data center will not be altered. However, future TIFs could allow voter input if a judge sides with voters instead of business and trade groups.

In an April 7 referendum, Port Washington voters approved giving residents a say in  approving tax incremental financing districts of more than $10 million. That only applies to future projects, not the $458 million TIF the city already approved for the data center for OpenAI and Oracle. 

What’s more, a judge reviewing a legal challenge from business and trade groups could strike down the referendum. 

The bottom line: Voters might be allowed to give input on approving TIFs, but the ordinance is facing legal challenge, is not set in stone and doesn’t affect the data center already under construction.

This fact brief is responsive to conversations such as this one.

Sources

• City of Port Washington: Notice of referendum
• Milwaukee Journal Sentinel: Port Washington passes TIF referendum proposed by data center skeptics
• Metropolitan Milwaukee Association of Commerce: MMAC, regional stakeholders file suit against Port Washington

Did Port Washington voters stop a $458 million data center project? is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.