Wisconsin data centers; Microsoft expansion sparks regulatory debate

MADISON, Wis. - Microsoft’s data center project in Racine County is poised to grow significantly, as new government records show the tech giant plans to build 15 additional data centers in Mount Pleasant. 

Utility costs in focus

What we know:

The expansion comes as Wisconsin lawmakers debate new restrictions aimed at regulating large data centers and limiting their impact on utility customers.

Republicans and Democrats agree that there should be new regulations placed on data centers. But they have massive disagreements over just about how. 

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Data centers require large amounts of electricity, sometimes prompting the need for new power plants and infrastructure. A central question for lawmakers is whether utility companies should be allowed to pass those costs on to everyday customers.

"These data centers will cover and pay their way," said State Rep. Shannon Zimmerman, R–River Falls.

Under the Republican-backed proposal, the Public Service Commission would be responsible for ensuring that no utility costs associated with serving large data centers are passed on to other customers. The PSC, which sets utility rates, would be required to enforce that standard.

But Democrats have questions.

"We have a public advocacy organization, Citizens Utility Board. Their whole entire purpose is to keep rates as low as possible for customers," said State Rep. Angela Stroud, D–Ashland. "They also said that the Republican bill will not keep rates low for customers."

PSC warning draws fire

What they're saying:

The PSC itself has raised concerns, warning the proposal could be difficult to implement and that its language could invite lawsuits and confusion. The PSC has said rates are set based on future projections and that it could not definitively ensure data center costs would not be passed on to customers.

"What it sounds like to me is the PSC getting some kind of talking points as to why they don't want to do their job," said Assembly Speaker Robin Vos. "They do this all the time where they figure out the correct rate."

Democratic leaders argue the bill was rushed and lacks accountability measures.

"We need to take action to regulate data centers, but we need to get it right," said Greta Neubauer, the Democratic minority leader from Racine. "Unfortunately, the GOP bill that we're voting on today will not do what it promises. It's been rushed through the process, will not hold corporations accountable in the way that we should, and it doesn't protect our communities entirely from the higher energy costs that are being discussed."

Renewables and water rules

Dig deeper:

The Republican proposal calls for all renewable energy for the data centers to be located onsite. Supporters say the provision addresses community concerns about large-scale renewable projects.

"The provision that requires that these renewable energy be on prem is also thoughtful in terms of its impact to the state. For example, in the St. Croix Valley that I represent, there's been a lot of folks up in arms about these large solar farms, and you know, it's altering their landscape," said Zimmerman.

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Democrats argue the renewable requirement does not go far enough.

"The GOP in Wisconsin has been completely uninterested in addressing the issue of climate change and supporting renewable development in Wisconsin. I think this is indicative of their ongoing allegiance with the fossil fuel industry," said Neubauer.

The bill would also require data centers to use closed-loop water cooling systems, meaning the same water is reused, while allowing future systems that use less water. It mandates yearly reports on water usage and requires data centers to file a security deposit, so the land can be restored for other uses.

Uncertain future

What we know:

The Assembly passed the bill 53–44.

But because Republicans control the Legislature and a Democratic governor would need to sign the bill, its future is uncertain. 

Outside the bill, We Energies has asked the PSC to place the costs of new electrical infrastructure directly on the data centers themselves. Microsoft has said it supports that approach.

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