As power-hungry data centers proliferate, states are searching for ways to protect utility customers from the steep costs of upgrading the electrical grid, trying instead to shift the cost to AI-driven tech companies. (Dana DiFilippo/New Jersey Monitor)
At a public hearing held by the Wisconsin Public Service Commission Tuesday, dozens of Wisconsin residents decried the effects massive data centers could have on the state’s electricity rates and ability to adopt renewable energy sources.
The three-member PSC is considering a proposal from the Wisconsin Electric Power Company to establish a tariff system for providing electricity to massive data centers. Under the proposal, “very large” customers that would be subject to the tariff would have a combined energy load of 500 megawatts — the equivalent of powering about 400,000 homes.
The first phase of Microsoft’s $13.3 billion data center project in Mount Pleasant is projected to require 450 megawatts.
Critics of the proposal say that under this system, regular consumers will still be on the hook for 25% of the infrastructure costs associated with increasing the state’s energy load.
Over the past year, the growth of data center development in Wisconsin has spurred an increasingly tense debate. Local governments have been tempted to allow their construction as a source of property tax revenue while local residents raise concerns over energy and water use, the conversion of historical farmland, the ethics of artificial intelligence and long-term environmental impacts.
The massive energy needs of data centers have become the central issue in the debate, with people in Wisconsin and around the country questioning how to manage the demands of giant corporations seeking to use orders of magnitude more energy than is currently being produced.
“I speak to you not only as a We Energies customer, a member of the Wisconsin State Senate, but on behalf of people across Wisconsin who have communicated to me their worry and fear about the development of hyperscale data centers,” Sen. Chris Larson (D-Milwaukee) said at the hearing. “This worry and fear transcends political divides and income brackets, residents and small businesses alike fear that these data centers will fundamentally alter and potentially destroy our Wisconsin way of life, and with good reason; the scale of the proposed development is unprecedented.”
Larson added that often “this debate is framed as a false choice that our state must prioritize economic growth or meet our clean energy and climate goals. This is simply not true. In reality, Wisconsin can and must be a leader in pursuing both advancing economic development while accelerating a just transition to affordable, reliable, clean energy in a way that does not harm residents, health, economic security or the environment.”
The vast majority of those testifying during the more than three-hour hearing Tuesday afternoon were opposed to the structure of the proposed system — largely due to the 500 megawatt threshold proposed by the utility company.
Several people said they were concerned that the threshold being set at this level would encourage the growth of still large data centers that use less than 500 megawatts of energy — and the costs of those centers’ electricity use will be passed on to regular consumers.
“I submit that 500 megawatts is at least an order of magnitude too high,” Pleasant Prairie resident Charles Hasenohrl said. “The threshold should be lower than 50 megawatts, where at that point, companies are required to cover all costs, which again include generation, transmission and distribution.”
Opponents also said they were concerned that data centers increasing the energy demand in Wisconsin will encourage the PSC and the state’s utility companies to construct new natural gas power plants, instead of encouraging the growth of renewable energy sources such as solar and wind.
“Renewable energy is the cheapest way to generate electricity, and it’s only getting cheaper,” Dr. Jonathan Patz, a professor of health and the environment at UW-Madison, said.
Patz added that burning fossil fuels to provide energy for currently proposed data centers in southeastern Wisconsin will increase air pollution not only in the immediate region but spread to Chicago and western Michigan.
“Because the right choice happens to be both the safest and the most affordable. That’s solar and wind power,” Patz said. “Let’s stop killing people unnecessarily with pollution from burning fossil fuels, especially knowing the multi-decadal life span of a power plant. The rest of the world is turning to renewable energy. Why should the PSC prevent us from transitioning to clean energy and improving our health at the same time?”
The handful of people who testified in favor of the proposal were union representatives. Several of the state’s unions have been vocal in supporting the construction of data centers, arguing that their members will benefit from the jobs created while the centers are being built. The union representatives said that the state should work to protect costs from being passed on to ratepayers, but that the state shouldn’t discourage data centers from coming to Wisconsin.
“These projects require significant amounts of power, far beyond what’s available today to be operational and successfully run,” Jim Meyer, business manager for IBEW Local 2150, said. “Faced with this problem, the traditional method of having a utility company add power generation capacity through building more power plants, then spreading those costs over its customer base, would simply be unfair to its everyday customer, like my membership, who live and work in the areas and are also customers themselves. The VLC tariff will put the tab for those plants exactly where it belongs, with those very large customers who need that new electric load.”
PSC Administrative Judge Michael Newmark said that the job of the commission isn’t to decide if the state should go all in on encouraging data center construction but only the “reasonableness of the rates, terms, and conditions of electric service” in the We Energies proposal. Several people testifying expressed frustration that often the commission holds public hearings only to ultimately vote against the majority sentiment of the public and side with corporate utility interests.
“I am wondering whether this is an exercise in futility,” Milwaukee resident Ted Kraig said. “Technologically, it makes no sense to be building up old fossil fuel infrastructure, and still, the Public Service Commission just goes and basically rubber stamps it. My concern is that we can have 1,000 people testifying with the best evidence and arguments imaginable, but the Public Service Commission sitting there with little check boxes … We Energies gets whatever it wants.”
The Public Service Commission is expected to make its decision on the tariff by May 1.
In Port Washington, Wisconsin, many residents oppose a $15 billion data center campus that’s currently under construction for end-users Oracle and OpenAI. (No Data Centers in Ozaukee County Facebook group)
Big Tech is here in Wisconsin, looking to make Wisconsin families and small businesses pay for data centers. The Wisconsin Public Service Commission (PSC) is about to make a decision that will affect all of us: We Energies has proposed a new rate structure on data centers that, as drafted, favors profits and protections for Big Tech companies and We Energies executives themselves, but putting Wisconsinites at risk to subsidize the costs. Here’s what’s going on and how you can do something about it.
What’s at stake?
We Energies, the largest and most profitable utility in the state, is preparing to spend $19.3 billion on electric generation due to data center proposals from Microsoft, Oracle, Vantage, and OpenAI.4. This is largely to build new gas plants in order to power the massive energy needs of Big Tech’s data centers. Here’s the problem: If sufficient protections aren’t in place now, the costs of these expensive gas plants may be forced onto families and small businesses, driving up people’s bills to keep the lights on and heat their homes in the winter.
We Energies’ proposals put us at risk for higher utility bills without fully ensuring that Big Tech is paying their fair share. As it currently stands, more expensive data centers likely means higher costs for all of us. Tech companies should be responsible for covering the cost of service needed to power their data centers, including the cost of building out power to service these high energy demands.
In addition to their problematic proposal, We Energies is proposing to add huge volumes of natural gas plants to feed these power-hungry data centers, which are expensive to build and take decades to pay off. These so-called “stranded assets” end up costing us more money for many years down the line, at times even when they are no longer in service. With rapidly changing AI technology, there is a very real risk that Big Tech does not move forward with planned data centers because they’re no longer profitable or needed. In short, data centers create short-term gains for Big Tech and We Energies with long-term consequences for Wisconsinites.
What’s going on behind Big Tech’s closed doors?
We Energies’ proposal encourages Big Tech to make decisions behind closed doors, without considering Wisconsinites or how their decisions will impact Wisconsin lands, waters and natural resources. We should all be suspicious of this. What’s happening in these meetings that We Energies and Big Tech don’t want us to know about? If Big Tech builds data centers in Wisconsin communities, Wisconsin communities deserve to know what deals are being made with the utilities.
Transparency and accountability are crucial. Big Tech and utilities like We Energies must make their data center reporting, planning and financials publicly available, so that regulators like the PSC can implement protections and ensure Wisconsinites aren’t being taken advantage of. We deserve to always know how and why our electric and gas bills are being affected.
The time to take action is now.
If We Energies builds new gas plants to power Big Tech’s data centers, all of us will live with greater risks of rising gas and electricity prices as well as environmental impacts to our communities. If Big Tech wants to come into our state and use our state resources, they shouldn’t be putting us in jeopardy, they should be the ones taking on the risks.
As we prepare for the PSC to make a decision on data centers, we need to make our voices heard to decision makers: Big Tech and We Energies don’t get to decide what’s best for Wisconsin. You have a role to play in shaping the policies that affect you. Attend the virtual public hearing on Feb. 10 or by submitting a comment by Feb. 17.
How much should data centers pay for the massive amounts of new power infrastructure they require? Wisconsin’s largest utility, We Energies, has offered its answer to that question in what is the first major proposal before state regulators on the issue.
Under the proposal, currently open for public comment, data centers would pay most or all of the price to construct new power plants or renewables needed to serve them, and the utility says the benefits that other customers receive would outweigh any costs they shoulder for building and running this new generation.
But environmental and consumer advocates fear the utility’s plan will actually saddle customers with payments for generation, including polluting natural gas plants, that wouldn’t otherwise be needed.
States nationwide face similar dilemmas around data centers’ energy use. But who pays for the new power plants and transmission is an especially controversial question in Wisconsin and other “vertically integrated” energy markets, where utilities charge their customers for the investments they make in such infrastructure — with a profit, called “rate of return,” baked in. In states with competitive energy markets, like Illinois, by contrast, utilities buy power on the open market and don’t make a rate of return on building generation.
Although six big data center projects are underway in Wisconsin, the state has no laws governing how the computing facilities get their power.
Lawmakers in the Republican-controlled state Legislature are debating two bills this session. The Assembly passed the GOP-backed proposal on Jan. 20, which, even if it makes it through the Senate, is unlikely to get Democratic Gov. Tony Evers’ signature. According to the Milwaukee Journal Sentinel, a spokesperson for Evers said on Jan. 14 that “the one thing environmentalists, labor, utilities, and data center companies can all agree on right now is how bad Republican lawmakers’ data center bill is.” Until a measure is passed, individual decisions by the state Public Service Commission will determine how utilities supply energy to data centers.
The We Energies case is high stakes because two data centers proposed in the utility’s southeast Wisconsin territory promise to double its total demand. One of those facilities is a Microsoft complex that the tech giant says will be “the world’s most powerful AI datacenter.”
The utility’s proposal could also be precedent-setting as other Wisconsin utilities plan for data centers, said Bryan Rogers, environmental justice director for the Milwaukee community organization Walnut Way Conservation Corp.
“As goes We Energies,” Rogers said, “so goes the rest of the state.”
Building new power
We Energies’ proposal — first filed last spring — would let data centers choose between two options for paying for new generation infrastructure to ensure the utility has enough capacity to meet grid operator requirements that the added electricity demand doesn’t interfere with reliability.
In both cases, the utility will acquire that capacity through “bespoke resources” built specifically for the data center. The computing facilities technically would not get their energy directly from these power plants or renewables but rather from We Energies at market prices.
Under the first option, called “full benefits,” data centers would pay the full price of constructing, maintaining and operating the new generation and would cover the profit guaranteed to We Energies. The data centers would also get revenue from the sale of the electricity on the market as well as from renewable energy credits for solar and wind arrays; renewable energy credits are basically certificates that can be sold to other entities looking to meet sustainability goals.
The second option, called “capacity only,” would have data centers paying 75% of the cost of building the generation. Other customers would pick up the tab for the remaining 25% of the construction and pay for fuel and other costs. In this case, both data centers and other customers would pay for the profit guaranteed to We Energies as part of the project, though the data centers would pay a different — and possibly lower — rate than other customers.
Developers of both data centers being built in We Energies’ territory support the utility’s proposal, saying in testimony that it will help them get online faster and sufficiently protect other customers from unfair costs.
Consumer and environmental advocacy groups, however, are pushing back on the capacity-only option, arguing that it is unfair to make regular customers pay a quarter of the price for building new generation that might not have been necessary without data centers in the picture.
“Nobody asked for this,” said Rogers of Walnut Way. The Sierra Club told regulators to scrap the capacity-only option. The advocacy group Clean Wisconsin similarly opposes that option, as noted in testimony to regulators.
But We Energies says everyone will benefit from building more power sources.
“These capacity-only plants will serve all of our customers, especially on the hottest and coldest days of the year,” We Energies spokesperson Brendan Conway wrote in an email. “We expect that customers will receive benefits from these plants that exceed the costs that are proposed to be allocated to them.”
We Energies has offered no proof of this promise, according to testimony filed by the Wisconsin Industrial Energy Group, which represents factories and other large operations. The trade association’s energy adviser, Jeffry Pollock, told regulators that the utility’s own modeling of the capacity-only approach showed scenarios in which the costs borne by customers outweigh the benefits to them.
Clean energy is another sticking point. Clean Wisconsin and the Environmental Law and Policy Center want the utility’s plan to more explicitly encourage data centers to meet capacity requirements in part through their own on-site renewables and to participate in demand-response programs. Customers enrolled in such programs agree to dial down energy use during moments of peak demand, reducing the need for as many new power plants.
“It’s really important to make sure that this tariff contemplates as much clean energy and avoids using as much energy as possible, so we can avoid that incremental fossil fuel build-out that would otherwise potentially be needed to meet this demand,” said Clean Wisconsin staff attorney Brett Korte.
And advocates want the utility to include smaller data centers in its proposal, which in its current form would apply only to data centers requiring 500 megawatts of power or more.
We Energies’ response to stakeholder testimony was due on Jan. 28, and the utility and regulators will also consider public comments that are being submitted. After that, the regulatory commission may hold hearings, and advocates can file additional briefs. Eventually, the utility will reach an agreement with commissioners on how to charge data centers.
Risky business
Looming large over this debate is the mounting concern that the artificial intelligence boom is a bubble. If that bubble pops, it could mean far less power demand from data centers than utilities currently expect.
In November, We Energies announced plans to build almost 3 gigawatts of natural gas plants, renewables and battery storage. Conway said much of this new construction will be paid for by data centers as their bespoke resources.
But some worry that utility customers could be left paying too much for these investments if data centers don’t materialize or don’t use as much energy as predicted. Wisconsin consumers are already on the hook for almost $1 billion for “stranded assets,” mostly expensive coal plants that closed earlier than originally planned, as Wisconsin Watch recently tabulated.
“The reason we bring up the worst-case scenario is it’s not just theoretical,” said Tom Content, executive director of the Citizens Utility Board of Wisconsin, the state’s primary consumer advocacy organization. “There’s been so many headlines about the AI bubble. Will business plans change? Will new AI chips require data centers to use a lot less energy?”
We Energies’ proposal has data centers paying promised costs even if they go out of business or otherwise prematurely curtail their demand. But developers do not have to put up collateral for this purpose if they have a positive credit rating. That means if such data center companies went bankrupt or otherwise couldn’t meet their financial obligations, utility customers may end up paying the bill.
Steven Kihm, the Citizens Utility Board’s regulatory strategist and chief economist, gave examples of companies that had stellar credit until they didn’t, in testimony to regulators. The company that made BlackBerry handheld devices saw its stock skyrocket in the mid-2000s, only to lose most of its value with the rise of smartphones, he noted. Energy company Enron, meanwhile, had a top credit rating until a month before its 2001 collapse, Kihm warned. He advised regulators that data center developers should have to put up adequate collateral regardless of their credit rating.
The Wisconsin Industrial Energy Group echoed concerns about risk if data centers struggle financially.
“The unprecedented growth in capital spending will subject (We Energies) to elevated financial and credit risks,” Pollock told regulators. “Customers will ultimately provide the financial backstop if (the utility) is unable to fully enforce the terms” of its tariff.
Jeremy Fisher, Sierra Club’s principal adviser on climate and energy, equated the risk to co-signing “a loan on a mansion next door, with just the vague assurance that the neighbors will almost certainly be able to cover their loan.”
A version of this article was first published by Canary Media.
The former site of the We Energies Power Plant on Nov. 13, 2025, in Pleasant Prairie, Wis. (Photo by Joe Timmerman/Wisconsin Watch)
By some measures, the Pleasant Prairie Power Plant, once regarded locally as an “iconic industrial landmark,” had a good run.
Opened in 1980 near Lake Michigan in Kenosha County, it became Wisconsin’s largest generating plant, burning enough Wyoming coal, some 13,000 tons a day, to provide electricity for up to 1 million homes.
But over time, the plant became too expensive to operate. The owner, We Energies, shut it down after 38 years, in 2018.
We Energies customers, however, are still on the hook.
A portion of their monthly bills will continue to pay for Pleasant Prairie until 2039 — 21 years after the plant stopped producing electricity.
In fact, residential and business utility customers throughout Wisconsin owe nearly $1 billion on “stranded assets” — power plants like Pleasant Prairie that have been or will soon be shut down, a Wisconsin Watch investigation found.
That total will likely grow over the next five years with additional coal plants scheduled to cease operations.
Customers must pay not only for the debt taken on to build and upgrade the plants themselves, but also an essentially guaranteed rate of return for their utility company owners, long after the plants stop generating revenue themselves.
“We really have a hard time with utilities profiting off of dead power plants for decades,” said Todd Stuart, executive director of the Wisconsin Industrial Energy Group.
The $1 billion tab looms as Wisconsin utility companies aim to generate unprecedented amounts of electricity for at least seven major high-tech data centers that are proposed, approved or under construction. By one estimate, just two of the data centers, which are being built to support the growth of artificial intelligence, would use more electricity than all Wisconsin homes combined.
All of which raises an important question in Wisconsin, where electricity rates have exceeded the Midwest average for 20 years.
What happens to residents and other ratepayers if AI and data centers don’t pan out as planned, creating a new generation of stranded assets?
How much do Wisconsin ratepayers owe on stranded assets?
Of the five major investor-owned utilities operating in Wisconsin, two — We Energies and Wisconsin Public Service Corp. — have stranded assets on the books. Both companies are subsidiaries of Milwaukee-based WEC Energy Group.
As of December 2024, when the company released its most recent annual report, We Energies estimated a remaining value of more than $700 million across three power plants with recently retired units: Pleasant Prairie, Oak Creek and Presque Isle, a plant on Michigan’s Upper Peninsula.
Wisconsin Public Service Corp.’s December 2024 report listed roughly $30 million in remaining value on recently retired units at two power plants.
In total, utilities owned by WEC Energy Group will likely have over $1 billion in recently retired assets by the end of 2026.
The company also noted a remaining value of just under $250 million for its share of units at Columbia Generating Station slated to retire in 2029, alongside a remaining value of roughly $650 million for units at Oak Creek scheduled to retire next year.
Its customers will pay off that total, plus a rate of return, for years to come.
The company estimates that closing the Pleasant Prairie plant alone saved $2.5 billion, largely by avoiding future operating and maintenance costs and additional capital investments.
Both Wisconsin Power and Light and Madison Gas and Electric also own portions of the Columbia Energy Center, and Wisconsin Power and Light also operates a unit at the Edgewater Generating Station scheduled for retirement before the end of the decade. Neither company provided estimates of the values of those facilities at time of retirement. Andrew Stoddard, a spokesman for Alliant Energy, Wisconsin Power and Light’s parent company, argued against treating plants scheduled for retirement with value on the books as future stranded assets.
How stranded assets occurred: overcommitting to coal
In 1907, Wisconsin became one of the first states to regulate public utilities. The idea was that having competing companies installing separate gas or electric lines was inefficient, but giving companies regional monopolies would require regulation.
Utility companies get permission to build or expand power plants and to raise rates from the three-member state Public Service Commission. The commissioners, appointed by the governor, are charged with protecting ratepayers as well as utility company investors.
A demolition sign is posted at the former site of the We Energies Power Plant on Nov. 13, 2025, in Pleasant Prairie, Wis. (Photo by Joe Timmerman/Wisconsin Watch)
Stranded assets have occurred across the nation, partly because of the cost of complying with pollution control regulations. But another factor is that, while other utilities around the country moved to alternative sources of energy, Wisconsin utilities and, in turn, the PSC overbet on how long coal-fired plants would operate efficiently:
In the years before We Energies pulled the plug on Pleasant Prairie, the plant had mostly gone dark in spring and fall. Not only had coal become more expensive than natural gas and renewables, but energy consumption stayed flat. By 2016, two years before Pleasant Prairie’s closure, natural gas eclipsed coal for electricity generation nationally.
In 2011, We Energies invested nearly $1 billion into its coal-fired Oak Creek plant south of Milwaukee to keep it running for 30 more years. The plant, which began operating in 1965 and later became one of the largest in the country, is now scheduled to completely retire in 2026 — with $650 million on the books still owed. That will cost individual ratepayers nearly $30 per year for the next 17 years, according to RMI, a think tank specializing in clean energy policy. The majority of the debt tied to those units stems from “environmental controls we were required to install to meet federal and state rules,” WEC Energy Group spokesperson Brendan Conway said.
In 2013, to settle pollution violations, Alliant Energy announced an investment of more than $800 million in the Columbia Energy Center plant in Portage, north of Madison. But by 2021, Alliant announced plans to begin closing the plant, though now it is expected to operate until at least 2029.
Various factors encourage construction and upgrades of power plants.
Building a plant can create upwards of 1,000 construction jobs, popular with politicians. Moreover, the Public Service Commission, being a quasi-judicial body, is governed by precedent. For example, if the PSC determined it was prudent to allow construction of a utility plant, that finding would argue in favor of approving a later expansion of that plant.
The PSC allowed utility companies “to overbuild the system,” said Tom Content, executive director of the Wisconsin Citizens Utility Board, a nonprofit advocate for utility customers. “I think the mistake was that we allowed so much investment, and continuing to double down on coal when it was becoming less economic.”
Utilities “profit off of everything they build or acquire,” Stuart said, “and so there is a strong motivation to put steel in the ground and perhaps to even overbuild.”
Conway, the WEC Energy Group spokesperson, argued that the utilities’ plans to retire plants amount to a net positive for customers.
“We began our power generation reshaping plan about a decade ago,” he wrote in an email. “That includes closing older, less-efficient power plants and building new renewable energy facilities and clean, efficient natural gas plants. This plan reduces emissions and is expected to provide customers significant savings — hundreds of millions of dollars — over the life of the plan.”
Guaranteed profits add to ratepayer burden
The built-in profits that utility companies enjoy, typically 9.8%, add to the stranded assets tab.
When the Public Service Commission approves construction of a new power plant, it allows the utility company to levy electricity rates high enough to recover its investment plus the specified rate of return — even after a plant becomes a stranded asset.
The former site of the We Energies Power Plant on Nov. 13, 2025, in Pleasant Prairie, Wis. (Photo by Joe Timmerman/Wisconsin Watch)
“We give them this license to have a monopoly, but the challenge is there’s no incentive for them to do the least-cost option,” Content said. “So, in terms of building new plants, there’s an incentive to build more … and there’s incentive to build too much.”
When the Pleasant Prairie plant was shut down in 2018, the PSC ruled that ratepayers would continue to pay We Energies to cover the cost of the plant itself, plus the nearly 10% profit. The plant’s remaining value, initially pegged at nearly $1 billion, remained at roughly $500 million as of December 2024.
Eliminating profits on closed plants would save ratepayers $300 million on debt payments due to be made into the early 2040s, according to Content’s group.
New ‘stranded assets’ threat: data centers
As artificial intelligence pervades society, it’s hard to fathom how much more electricity will have to be generated to power all of the data centers under construction or being proposed in Wisconsin.
We Energies alone wants to add enough energy to power more than 2 million homes. That effort is largely to serve one Microsoft data center under construction in Mount Pleasant, between Milwaukee and Racine, and a data center approved north of Milwaukee in Port Washington to serve OpenAI and Oracle AI programs. Microsoft calls the Mount Pleasant facility “the world’s most powerful data center.”
Data centers are also proposed for Beaver Dam, Dane County, Janesville, Kenosha and Menomonie.
The energy demand raises the risk of more stranded assets, should the data centers turn out to be a bubble rather than boom.
“The great fear is, you build all these power plants and transmission lines and then one of these data centers only is there for a couple years, or isn’t as big as promised, and then everybody’s left holding the bag,” Stuart said.
The sun sets as construction continues at Microsoft’s data center project on Nov. 13, 2025, in Mount Pleasant, Wis. (Photo by Joe Timmerman/Wisconsin Watch)
In an October Marquette Law School poll, 55% of those surveyed said the costs of data centers outweigh the benefits. Environmental groups have called for a pause on all data center approvals. Democratic and Republican leaders are calling for data centers to pay their own way and not rely on utility ratepayers or taxpayers to pay for their electricity needs.
Opposition in one community led nearly 10,000 people to become members of the Stop the Menomonie Data Center group on Facebook. In Janesville, voters are trying to require referendums for data centers. In Port Washington, opposition to the data center there led to three arrests during a city council meeting.
Utilities are scheduled in early 2026 to request permission from the Public Service Commission to build new power plants or expand existing plants to accommodate data centers.
Some states, such as Minnesota, have adopted laws prohibiting the costs of stranded assets from data centers being passed onto ratepayers.
Wisconsin has no such laws.
Shifting cost burden to utility companies
Currently, ratepayers are on the hook for paying off the full debt of stranded assets — unless a financial tool called securitization reduces the burden on ratepayers.
Securitization is similar to refinancing a mortgage. With the state’s permission, utilities can convert a stranded asset — which isn’t typically a tradeable financial product — into a specialized bond.
Utility customers must still pay back the bond. But the interest rate on the bond is lower than the utility’s standard profit margin, meaning customers save money.
A 2024 National Association of Regulatory Utility Commissioners report noted that utilities’ shareholders may prefer a “status quo” scenario in which customers pay stranded asset debts and the standard rate of return. Persuading utilities to agree to securitization can require incentives from regulators or lawmakers, the report added.
In some states, utilities can securitize the remaining value of an entire power plant. Michigan utility Consumers Energy, for instance, securitized two coal generating units retired in 2023, saving its customers more than $120 million.
In Wisconsin, however, utilities can securitize only the cost of pollution control equipment on power plants — added to older coal plants during the Obama administration, when utilities opted to retrofit existing plants rather than switching to new power sources.
The Oak Creek Power Plant and Elm Road Generating Station, seen here on April 25, 2019, in Oak Creek, Wis., near Milwaukee, are coal-fired electrical power stations. (Photo by Coburn Dukehart/Wisconsin Watch)
In 2023, two Republican state senators, Robert Cowles of Green Bay and Duey Stroebel of Saukville, introduced legislation to allow the Public Service Commission to order securitization and allow securitization to be used to refinance all debt on stranded assets. The bill attracted some Democratic cosponsors, but was opposed by the Wisconsin Utilities Association and did not get a hearing.
Democratic Gov. Tony Evers proposed additional securitization in his 2025-27 budget, but the Legislature’s Republican-controlled Joint Finance Committee later scrapped the provision.
Even Wisconsin’s narrow approach to securitization is optional, however, and most utilities have chosen not to use it.
We Energies was the first Wisconsin utility to do so, opting in 2020 to securitize the costs of pollution control equipment at the Pleasant Prairie plant. Wisconsin’s Public Service Commission approved the request, saving an estimated $40 million. “We will continue to explore that option in the future,” Conway said.
But the PSC expressed “disappointment” in 2024 when We Energies “was not willing to pursue securitization” to save customers $117.5 million on its soon-to-retire Oak Creek coal plant. The utility noted state law doesn’t require securitization.
Stuart said that if utilities won’t agree to more securitization, they should accept a lower profit rate once an asset becomes stranded.
“It would be nice to ease that burden,” he said. “Just to say, hey, consumers got to suck it up and deal with it, that doesn’t sound right. The issue of stranded assets, like cost overruns, is certainly ripe for investigation.”
Comprehensive planning required elsewhere — but not Wisconsin
Avoiding future stranded assets could require a level of planning impossible under Wisconsin’s current regulatory structure.
When the state’s utilities propose new power plants, PSC rules require the commission to consider each new plant alone, rather than in the context of other proposed new plants and the state’s future energy needs. Operating without what is known as an integrated resource plan, or IRP, opened the PSC to overbuilding and creating more stranded assets. IRPs are touted as an orderly way to plan for future energy needs.
“There’s no real comprehensive look in Wisconsin,” Stuart said. “We’re one of the few regulated states that really doesn’t have a comprehensive plan for our utilities.
”We’ve been doing some of these projects kind of piecemeal, without looking at the bigger picture.”
Protesters speak against a proposed natural gas power plant in Oak Creek, Wis., on March 25, 2025. (Photo by Julius Shieh/Milwaukee Neighborhood News Service)
Structured planning tools like IRPs date back to the 1980s, when concerns about cost overruns, fuel price volatility and overbuilding prompted regulators to step in. Minnesota and Michigan require utilities to file IRPs, as do a majority of states nationwide.
Evers proposed IRPs in his 2025-27 state budget, but Republican lawmakers removed that provision because it was a nonfiscal policy issue.
Northern States Power Company, which operates in Wisconsin and four other Midwestern states, is required by both Michigan and Minnesota to develop IRPs. “Because of these rules, we create a multi-state IRP every few years,” said Chris Ouellette, a spokesperson for Xcel Energy, the utility’s parent company.
Madison Gas and Electric, which only operates in Wisconsin, argued that its current planning process is superior to the IRP requirements in neighboring states. “A formal IRP mandate would add process without improving outcomes,” spokesperson Steve Schultz said. “Wisconsin’s current framework allows us to move quickly, maintain industry-leading reliability and protect customer costs during a period of rapid change.”
How to influence decisions relating to stranded assets
The devil will be in the details on whether the Public Service Commission adopts strong policies to prevent the expected wave of new power plant capacity from becoming stranded assets, consumer advocates say.
The current members, all appointed by Evers, are: chairperson Summer Strand, Kristy Nieto and Marcus Hawkins.
The public can comment on pending cases before the PSC via its website, by mail or at a public hearing. The commission posts notices of its public hearings, which can be streamed via YouTube.
Barbed wire fence surrounds the former site of the We Energies Power Plant on Nov. 13, 2025, in Pleasant Prairie, Wis. (Photo by Joe Timmerman/Wisconsin Watch)
Among the upcoming hearings on requests by utilities to generate more electricity for data centers:
Feb. 12: We Energies’ request to service data centers in Mount Pleasant and Port Washington. We Energies says the fees it proposes, known as tariffs, will prevent costs from being shifted from the data centers to other customers. The “party” hearing is not for public comment, but for interaction between PSC staff and parties in the case, such as We Energies and public interest groups.
Feb. 26: Another party hearing for a case in which Alliant Energy also said its proposed tariffs won’t benefit the data center in Beaver Dam at the expense of other customers.
To keep abreast of case developments, the PSC offers email notifications for document filings and meetings of the commission.
The PSC would not provide an official to be interviewed for this article. It issued a statement noting that utilities can opt to do securitization to ease the financial burden on ratepayers, adding:
“Beyond that, the commission has a limited set of tools provided under state law to protect customers from costs that arise from early power plant retirements. It would be up to the state Legislature to make changes to state law that would provide the commission with additional tools.”
On Nov. 6, state Sen. Jodi Habush Sinykin, D-Whitefish Bay, and Rep. Angela Stroud, D-Ashland, announced wide-ranging data center legislation. One provision of their proposal aims to ensure that data centers don’t push electricity costs onto other ratepayers.
The roof of the Hotel Verdant in Downtown Racine is topped with a green roof planted with sedum and covered with solar panels. (Wisconsin Examiner photo)
A Wisconsin Senate Committee held a public hearing Tuesday on a bill that would allow private companies to construct small solar projects on underutilized farmland and commercial rooftops across the state.
The bill, which would encroach on the monopoly the state’s existing utility companies are allowed to maintain under state law, is being considered while people across the country worry about rising energy costs amid a boom in the construction of data centers and the increased use of electric vehicles and appliances.
Environmental groups in the state have also regularly complained that the utility companies aren’t constructing enough renewable energy projects or sunsetting existing coal and natural gas power plants quickly enough.
The bill, authored by Sen. Patrick Testin (R-Stevens Point) and Rep. Scott Krug (R-Nekoosa), would allow people in Wisconsin to subscribe to get some of their power from a local “community solar” installation. The subscribers would receive credits they can put toward their utility bill. Because the power developed at the local solar installation will still need to travel through the utility company’s infrastructure, the bill includes a provision that all subscribers to the program would have to pay at least $20 per month on their electric bill.
In the hearing of the Senate Committee on Transportation and Local Government, the bill’s authors said allowing community solar projects would increase people’s energy choices while allowing the expansion of solar power in the state that avoids the objections from local residents that often come with large, utility-scale solar projects.
“This change will open a new market sector in a high energy industry, attract economic investments in Wisconsin, create local jobs, drive innovation and competition, and ultimately save consumers and small businesses money on their energy bills,” Testin said.
But the authors also acknowledged there is still a lot of disagreement over the details and the bill is not yet in its final form.
“We’re not exactly there yet. We’re not all agreeing on this being the best way forward just yet, but this public hearing is a really important step to vet that out a little bit more to get us closer to that answer,” Krug said. “So yes, there are still some kinks to work out between the utilities and individuals who want a more market-based approach to solar. I hope we can work through those issues here.”
Over the hearing’s three and a half hours, the testimony split among two groups — the utility companies who are opposed to the bill and a coalition of solar companies, economists, farmers and employers who are in favor.
The utility companies accused the bill of creating a “shell game” that would lower the costs for the subscribers of a given project while raising electric bills for everyone else. Zack Hill, testifying on behalf of Alliant Energy, said the utility estimated that community solar would result in an additional $8.75 billion in costs for ratepayers over the next 25 years.
“How does [the bill] pay for subscribers 10 to 20% energy savings? The short answer: It will shift costs to your other constituents,” Hill said. “Some have said this sounds like community solar voodoo economics, but all you have to remember is this, when a company promises you a discount, someone else has to pay for it.”
People in favor of the bill argued that the generation of more energy could only help lower energy costs while disputing the utility companies’ claims. Will Flanders, the research director at the conservative Wisconsin Institute for Law and Liberty, also said the utilities’ estimates undervalue the benefits that community solar can add.
“This is a model that expands energy choice without large subsidies, without mandates, without turning more power over to monopoly utilities,” Flanders said. “In fact, it introduces competition at a time when Wisconsin needs it the most.”
“We argue that community solar can deliver net savings to the entire system,” he continued. “When we talk about a shell game, what we’re really saying is there’s no real additional resources being put into the system, but obviously there is additional resources being put in when we have these with these programs in place.”
Karl Rabago, a Denver-based energy consultant who testified with Flanders, said that the Alliant $8.75 billion estimate amounted to a threat that if the utilities don’t get to sell the energy, they’ll charge consumers for that loss.
“No one knows where this number comes from, but having seen how utilities make their case in other states, I am 99.9% confident they are basically saying, ‘If we don’t get to make the electricity and sell it, we could potentially lose $8.75 billion and and if we don’t make that money, we’re going to charge you for it anyway,’ and that’s how customer costs could go up,” Rabago said. “That’s the most likely explanation for a histrionic number. The utility position, to summarize, seems to sound a bit like ‘let us do it all and no one gets hurt.’ We’ve heard those kinds of exhortations. Monopolies do it particularly well.”
Toward the end of the hearing, a number of Wisconsin property owners testified, touting the benefits they’ll receive if they’re able to allow solar projects to be constructed on their land.
Duane Hinchley, a Cambridge dairy farmer, said community solar is an “innovative solution” that can give farmers a stable income to hedge against the risks in the agriculture business. Plus, he said, allowing farmers to participate will prevent land that has been farmed for generations from being developed into subdivisions.
“With the right policies in place, our state’s proud agricultural heritage can be a cornerstone of Wisconsin’s clean energy future,” Hinchley said.
But throughout the day, lawmakers from both parties appeared skeptical of the bill’s benefits.
Sen. Van Wanggaard (R-Racine) said repeatedly he didn’t understand how the program would work for the utility companies.
“It sounds like a shell game to me,” he said. “I just, I’m really having a challenge with trying to figure out how that would work, because it would seem to me that the energy company, the regulated company, is the one that’s going to be footing the bill for this.”
Sen. Mark Spreitzer (D-Beloit) questioned how the program wouldn’t eventually raise energy costs for non-participants, but said one selling point for the bill was that it would encourage the increased development of renewable energy.
“I heard you say this is going to force more solar to be built, whether or not you need it,” Spreitzer said to a utility company representative. “And I guess that, to me, is the one selling point of the bill. Is that I look at where we’ve been in the landscape lately, where we have, unfortunately, federal incentives for solar that are going away. We have increasing demand for power from data centers. We’re seeing new natural gas plants get built. We’re seeing coal plants not being retired, when we hoped they would. To me, there’s plenty of need for solar.”
If the utility companies won’t support a community solar proposal, Spreitzer wondered, what do they need from the Legislature to encourage more solar development?
“And so if we’re not going to go down this route, what are the incentives that you all need to make sure that we can continue to drive solar development without increasing rates for customers and without saying, ‘let’s go build a natural gas plant instead?” he asked.
Anti-rights of nature bill
Also on Tuesday, the committee heard testimony on a bill from Sen. Steve Nass (R-Whitewater) that would prohibit local governments in Wisconsin from enacting “rights of nature” ordinances, which grant natural elements legal rights that can be protected in court.
Nass said in his testimony that the idea is anti-American and is contrary to the values of the U.S. Constitution.
“This is a radical departure from our current law. Rights are something that human beings have,” Nass said. “This concept of granting nature rights is something that has been done primarily in foreign countries … and many of these countries lean dramatically towards socialism and communism, and their attitude is not compatible with private property rights in our country.”
But proponents of rights of nature resolutions frequently point to the fact that corporations are granted rights under U.S. law. Communities including Green Bay and Milwaukee have passed or begun drafting rights of nature ordinances and some Democratic lawmakers have introduced a bill that would grant Devil’s Lake State Park some rights that can be protected in court.
In a statement after the hearing, Rep. Vincent Miresse (D-Stevens Point), one of the co-authors of the Democratic proposal, wrote, “As we heard from advocates today, Rights of Nature is one of the strongest tools local governments have to protect clean air, clean water and healthy soil for future generations — so that our grandchildren, and their children after them, can drink our waters, eat food grown in our soils, and hunt in our forests.”
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