State Regulators Make Substantial Modifications to We Energies’ AI Data Center Tariff Plan
Case will likely have implications across the state
Today the Public Service Commission of Wisconsin (PSC) issued a decision to approve the We Energies subsidiary WEPCO’s proposed rate structure for AI data centers with substantial modifications proposed by Clean Wisconsin and other intervenors. The case could serve as a blueprint for how other electric utilities in the state handle these extremely large new customers.
“This decision was an important and positive moment for the regulation of hyperscale data centers in Wisconsin,” said Clean Wisconsin attorney Brett Korte. “The Commission recognized that the tariff negotiated with tech companies and proposed by WEPCO did not do enough to protect households and businesses from increasing utility bills and took significant action to correct those deficiencies. Clean Wisconsin commends the Commission’s actions today. Families in WEPCO’s territory will have lower bills and cleaner air as a result.”
Clean Wisconsin intervened in the case to ensure protections exist for both utility customers and our environment. Without modification, We Energies’ proposed rate structure, also known as a “very large customer tariff,” would allow data centers to shift costs to families and small businesses while limiting the use of cheaper clean energy resources.
AI data centers are driving an enormous surge in electricity demand across Wisconsin, with some facilities consuming more power than entire cities. According to a recent Clean Wisconsin analysis, a single 1-gigawatt AI data center can use as much energy as a million Wisconsin homes.
The Commission’s decision:
- Lowered the “very large customer” size threshold from 250 megawatts (MW) to 100 MW and made the tariff mandatory for energy users over that size.
- Excluded the option for WEPCO to allocate 25% of the cost of power generation assets to other customers.
- Rejected WEPCO’s artificial limits on clean energy.
- Required ongoing reporting requirements to help ensure WEPCO’s other customers aren’t subsidizing data centers.
During the case, Clean Wisconsin urged regulators to adopt an AI data center rate structure that requires tech companies to pay the full cost of the infrastructure needed to serve their projects and allows energy demand to be met with clean power as much as possible.
“This decision is a step in the right direction, but there is still a lot of work to be done. While we should now see more clean energy serving data center load, and guardrails are in place to help prevent rising costs, the impact of AI data centers is still one of the most pressing environmental issues facing Wisconsin. Whether it is proposals to build more gas plants or rate cases where actual cost impacts must be analyzed, Clean Wisconsin will keep fighting to protect Wisconsin’s communities and environment.”
NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.
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