Council Opposes We Energies Data Center Plan

Alderwoman Marina Dimitrijevic in April 2024. Photo by Sophie Bolich.

Alderwoman Marina Dimitrijevic is fed up with We Energies.

“It’s not that funny that I have to keep talking about this because it keeps happening,” said the alderwoman on the council floor Tuesday. “In 2023, rates increased 9.2%; in 2024, 2.3%. Pending before the Public Service Commission in 2025 and 2026 are 6.9% and 3.3%. That ends up as a whopping 23% on ratepayers in the city of Milwaukee.”

And now she’s rallied her colleagues to oppose We Energies‘ proposal to create a special rate structure for data centers. The utility has said the rate structure will ensure data centers pay their own way, but Dimitrijevic doesn’t believe it will work.

The alderwoman is already pursuing a local pause on data center construction in Milwaukee.

“I am not here to argue whether AI or data is good or bad, what I am here to say is we must have transparency because there are severe impacts here,” she said.

Her argument Tuesday relied on the idea that many of the large planned data centers in Wisconsin might not be built as planned, that We Energies will still build much of the required infrastructure, and that others would be designed to be smaller than the minimum threshold to trigger the new pricing structure.

“What if these gas plants are built and they end up becoming useless if the demand doesn’t materialize?” asked Dimitrijevic. “So now, on the backs of our ratepayers, once again, who are already in a higher-than-the-national-average energy burden, we build nonrenewable gas plants that may not see a materialization of the demand or the need.”

The alderwoman already submitted her own written testimony to the Public Service Commission, which is in charge of setting We Energies’ rates. She found support from the council for formal opposition.

“We need to take a stand here. We Energies is completely out of control. And, also, fun fact, now they’re hand in hand with the data centers. And AI is completely out of control in our society,” said Ald. Alex Brower, who favors a publicly owned electric utility. “What do I mean by out of control? I mean that they are completely separate from democratic decision-making by regular people. This economy we’re in now is run by the millionaires and billionaires, and they’ve decided that it’s important to get AI slop on the internet rather than health care. And that’s unacceptable.”

“We are going to have to figure out something, otherwise people are going to continue to gouge our constituents,” said Ald. Sharlen P. Moore.

The Common Council unanimously endorsed opposition to the rate structure. The proposal was co-sponsored by council members Brower, Moore, Russell W. Stamper, II, Robert Bauman, José G. Pérez, JoCasta Zamarripa, Peter Burgelis and Larresa Taylor.

The resolution’s adoption is subject to Mayor Cavalier Johnson‘s review.

Citizens Utility Board Executive Director Tom Content is also opposing the rate structure. “The bottom line is we think there are loopholes in what We Energies has proposed that actually do put customers at risk of paying additional costs with this data center wave,” he told the commission in written testimony in January. A provision in We Energies’ proposal would allow data center owners to pay only 75% of the cost of new plants. The utility has argued that the arrangement would allow regular customers to benefit from selling excess power to other providers via the Midwest energy grid at times of high demand.

The council’s resolution calls for data centers to pay 100% of associated costs.

We Energies, in a filing, has already agreed to lower the tariff threshold from 500 megawatts to 250, which would require more data centers to pay the elevated rates. But, in We Energies’ filing, it said it would be optional for companies to opt in to the rate structure.

“Protecting our customers from data center costs is at the foundation of our proposal filed with state regulators. Under our customer protection plan, data centers will pay their own way — covering both the power they use, and the cost of new power generation and equipment built to serve them,” said spokesperson Brendan Conway in a statement. “That means Wisconsin families are not subsidizing these projects. Our proposal is fair, transparent, and establishes strong safeguards — including binding agreements so data centers’ owners, not other customers, pay for the infrastructure they require.”

We Energies is planning to build more than $5 billion in new solar and natural gas plants to meet rising electricity demand.

The Public Service Commission is expected to rule on the rate case in the coming months.

Legislation Link - Urban Milwaukee members see direct links to legislation mentioned in this article. Join today