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.

Correction: An earlier version of this story incorrectly identified Judge Michael Newmark. We regret the error

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.