The Wisconsin Public Service Commission (PSC) approved a new energy rate on Friday requiring data centers to pay 100% of their energy costs, according to wisn.com.
The decision aims to prevent Wisconsin residents from facing increased utility bills as the state prepares for massive power demand. New data centers under construction in Port Washington and Mount Pleasant could eventually require as much energy as all current We Energies customers combined, the outlet reported.
"This is a significant and consequential tariff docket unlike anything the commission has seen before," PSC Chair Summer Strand said, noting that the energy demand for these facilities could be comparable to a mid-size metro area.
Preventing cost-shifting
The PSC spent 13 months reviewing the plan and implemented changes to ensure data center companies cover all associated costs. The Commission lowered the energy demand threshold for rate eligibility from 500 MW to 100 MW, allowing smaller data centers to be included in the new rate structure.
Commissioners also extended the rate contract length from 10 years to 15 years to prevent long-term cost-shifting to existing customers. Additionally, the Commission removed a capacity-only option that would have allowed data centers to pay only 75% of power plant costs, leaving the remaining 25% to be covered by other We Energies customers.
"Existing Wisconsin customers should not pay a single cent to subsidize the service of data centers or very large customers. Not now. And not decades from now," Commissioner Kristy Nieto said.
Tom Content, a consumer advocate with the Citizens Utility Board, called the decision a win. "Putting them on the hook for all the power is important," Content said. He added that the risk to residents' energy bills is "a lot less" than it was prior to the decision.
We Energies issued a statement saying the company is working to ensure every customer benefits economically from the arrival of data centers without being forced to cover the costs for someone else's power. The company emphasized its responsibility to continue providing safe and reliable energy.
While the PSC's decision addresses the data center energy rate, the Commission noted that future approvals for power plants or other construction projects will still require separate reviews.
