Beware of Data Center Darkness

Data center. (CC0)

Hannah S. Richerson is a researcher on water management for the environmental group Clean Wisconsin. She calls the information on proposed data centers in Wisconsin as “clear as mud.”

“There has been a lack of transparency from data center developers around actual consumption rates for both energy and water,” she warns.

But that’s not all.

“We do not know the fuel type—coal, gas, oil, nuclear—that will be used to support onsite data center power demands,” she notes. “We don’t know the type of cooling systems that will be utilized onsite at data center campuses or offsite at power plants. We don’t know what kind of back-up power systems will be needed, such as diesel generators. And we don’t know where the water needed will be sourced—surface water or groundwater—or how the wastewater discharges will be maintained. We have many more questions than we have answers.”

The impact on this state could be massive. A report by the Lawrence Berkeley National Laboratory found that data centers used 4.4% of the nation’s electricity in 2022 and could use up to 12% by 2028. An analysis by the Brookings Institution noted projections that “AI’s energy needs could account for as much as 21% of all electricity usage by 2030.”

But those numbers might be small compared to that planned for southeast Wisconsin: We Energies plans to double — increase by 100% — its power generating capacity to handle the needs of proposed data centers in Mount Pleasant and Port Washington. It plans to build two new natural gas plants, seven new solar projects and one battery project.

“When a data center comes online, retail customers usually help to foot the electric bill,” the New Yorker reported. “American utilities sought almost thirty billion dollars in retail rate increases in the first half of 2025. This spring, utilities requested almost double the rate hikes from the same period a year earlier…. In areas near data centers, wholesale electricity costs have risen by more than two hundred per cent in the past five years.”

We Energies has promised this won’t happen. But the additional electric lines needed, to be built by the American Transmission Company, will be charged to all rate payers. As for the additional needed electric infrastructure, Dan Krueger, a vice president at WEC Energy Group, We Energies’ parent company, has said his company has worked with Microsoft (the company using the data center in Mount Pleasant) and Cloverleaf (the data center developer) to ensure these costs aren’t subsidized by residential or business customers. Yet no organization representing these ratepayers was consulted.

Most of the discussion about the massive water needs of data centers has centered on water used to cool the computers. But that overlooks the indirect usage: water needed by utilities for the vast amount of electrical power they will provide. While solar and wind power need no water, coal and gas and nuclear power require huge amounts of it. Clean Wisconsin has done an analysis estimating that just the electricity provided for the proposed data centers in Port Washington, if generated by non-renewable sources, would require at least 54 million gallons of water per day, equal to that used by about 970,000 Wisconsin residents. We Energies hasn’t yet estimated how much of the new power will come from non-renewables. But the Clean Wisconsin estimate doesn’t include the water for power provided to the huge Mount Pleasant data center.

As a result of data centers’ thirst for water, “in numerous cities and communities, water rates are rising substantially to deal with short supply and increasing demand,” the Brookings analysis noted. “One county in Georgia is raising its rates by 33%.”

“Data centers also cause local pollution,” the New Yorker reported. “Elon Musk’s xAI has built a natural-gas-powered data center in Memphis, near the Black neighborhood of Boxtown. The area, which already had the highest rate of emergency-room visits for asthma in Tennessee, saw levels of nitrogen dioxide, which exacerbates the condition, spike as much as nine per cent.”

A new report by Cornell researchers estimated that, by 2030, the current rate of AI growth would annually put 24 to 44 million metric tons of carbon dioxide into the atmosphere, the emissions equivalent of adding 5 to 10 million cars to U.S. roadways. Nationwide, data centers could contribute to 600,000 additional asthma-related symptom cases and over $20 billion in public health costs by 2030, according to researchers at the University of California, Riverside and Caltech.

As for the positive impact of data centers, “tax breaks for data centers do not deliver the promised economic benefits, such as high-paying jobs, and they reduce local tax revenues, while shifting financial burdens onto communities and schools,” according to a July report by University of Michigan researchers.

That can be seen in Wisconsin, where the Legislature passed a bill signed by Gov. Tony Evers that provided a sales tax exemption to all data centers and where the Microsoft deal with the local governments includes a property tax subsidy. In exchange they will get some construction jobs that end once the center is built and few permanent jobs. “Even in large-scale centers, construction jobs often total around 1,500 skilled trade workers and 100 operational jobs,” Brookings noted.

And those operational jobs have horrific working conditions. The noise level is so loud that “tinnitus is an occupational hazard,” a data center employee told New Yorker. “I like to hire people that can endure a lot of pain,” a corporate manager said.

There is, moreover, no guarantee, that these massive data centers, once built, won’t eventually become expensive ghost towns. “A.I., for all its wondrous capabilities, may disappoint investors. It may prove to be an unprofitable commodity,” the New Yorker warns, or “a technological innovation might render hyper-scaling obsolete.”

“The data center industry is coming in very quickly without providing much information and setting up very quickly,” Richerson warns. “I hope we are beginning to understand that we need more information.”

Sen. Chris Larson (D-Milwaukee) has warned of a “data center stampede” in Wisconsin and called on state officials to develop a strategy for how to manage it. “We must develop a statewide plan for data centers that prioritizes the needs of our neighbors and its impact on the environment and our communities before the profit margins of private utilities and big tech companies,” he said in a statement. “If we don’t,” he warned, Wisconsin may end up with a state “we no longer recognize — one that has abandoned its tradition of protecting our air, water, and land for future generations.”

Two Democratic legislators, Sen. Jodi Habush Sinykin of Whitefish Bay and Rep. Angela Stroud of Ashland, have proposed a bill to provide some “guardrails” for data centers, requiring quarterly reports on the amount of energy they provide and providing incentives for utilities to use renewable energy. But that is merely regulating after the centers are built and provides no plan on how to handle the rush of data centers to cut deals with local governments that have no restrictions on the amount of energy or water used or pollution created.

And even that legislation is probably unlikely to pass. No Republicans have announced support for the bill, and Gov. Evers did not respond to a request from Urban Milwaukee asking if he backs it.

When asked by Urban Milwaukee whether there is a need for greater state oversight of data centers, neither Republican Assembly Speaker Robin Vos nor Senate Majority Leader Devin LeMahieu offered a response.