Democrats object, want to force use of renewables
The state Assembly this week passed a bill barring data centers from passing on any utility costs to other ratepayers in Wisconsin — targeting a key objection from Wisconsinites who oppose data center development.
Assembly Bill 840, passed 53-44 almost entirely along party lines, also requires new data centers to use water-conserving technology for cooling and to report annual water use to the Department of Natural Resources.
The bill doesn’t specify how the Wisconsin Public Service Commission would go about ensuring that costs from new electrical infrastructure don’t land on existing ratepayers — only that the commission “shall ensure” it when it sets rates.
State Rep. Shannon Zimmerman, R-River Falls, principal author of the bill, said he was not particular about how protection for utilities’ existing customers was achieved, just that it be done. It’s a principle developers of two major data center projects under construction in Mount Pleasant and Port Washington have signaled agreement with.
In addition, Zimmerman’s bill would require new renewable energy sources needed to power a center to be on the center’s property. Operators would guarantee reclamation costs if a data center could not be completed, and municipalities would have the authority to determine what that reclamation would look like.
The bill’s requirements do not apply to the data centers under construction in Mount Pleasant and Port Washington. They will not apply to three others in various stages of planning — in Beaver Dam, DeForest and Janesville — if they begin construction before the bill is passed.
Zimmerman told the Badger Institute he thought the state Senate might consider the bill early next month.
“The bill balances the major concerns we were hearing about data centers around the state with their strategic economic importance to the state,” Zimmerman said.
Judging from comments made during the Assembly debate Tuesday by state Rep. Angela Stroud, D-Ashland, author of a very different data center regulatory bill, and staff for Gov. Tony Evers, Evers will veto Zimmerman’s bill in its present form.
Stroud’s bill, which has yet to get a committee hearing, is larded with progressive goals. They include millions of dollars in fees levied on data centers for support of the Green Innovation Fund, a demand that 70 percent of all data center power usage be derived from renewable energy sources and that construction workers be paid a union-level “prevailing wage,” a state requirement the Legislature did away with in 2017.
The Republican majority rejected Stroud’s proposal that her bill be added to Zimmerman’s, something that had been suggested by solar and wind energy advocates.
During the debate, Stroud referred to Zimmerman’s bill as “an embarrassment.”
“It’s hard because you want to work with people, but the Democrats were condescending — they were really, really abrasive about it,” Zimmerman said. “The entire focus of this bill is addressing what is really important to people.”
While Evers has not specifically said he would veto the bill, Britt Cudaback, in his communications department, last week issued a statement that said “the one thing environmentalists, labor, utilities, and data center companies can all agree on right now is how bad Republican lawmakers’ data center bill is.”
The Badger Institute contacted Evers’ staff and Stroud but had not heard back before this story published.
Both Microsoft in Mount Pleasant and Vantage in Port Washington have been vocal in support of paying their way to develop the power infrastructure made necessary by their projects’ power demands via a rate structure that insulates existing utility customers from any increases in power rates.
In a document issued Jan. 13, Microsoft President Brad Smith made this pledge:
“We’ll pay our way to ensure our datacenters don’t increase your electricity prices. First, we’ll ask utilities and public commissions to set our rates high enough to cover the electricity costs for our datacenters. This includes the costs of adding and using the electricity infrastructure needed for the datacenters we build, own, and operate.”
We Energies and Alliant Energy have asked that the Public Service Commission create tariffs — that is, schedules of rates — for large power users such as data centers that would cover increased costs.
The two utilities would like those tariffs to apply statewide, as is the case with Zimmerman’s bill. The PSC has until May 1, 2026, to decide on the proposal.
Tanner Blair, the PSC’s director of policy and legislative affairs, suggested utilities serving data centers file applications for rate setting to be considered by the PSC every two years.
Unlike rates for electricity, cost allocations related to transmission lines are the purview of the Federal Energy Regulatory Commission, according to the PSC.
On the issue of water use, Zimmerman’s bill requires that all data center hardware be cooled by some kind of a closed loop cooling system, meaning the liquid in the loop is cooled electrically, rather than a system replenished by fresh water.
All five of the current data center proposals include closed loop cooling systems.
“We’ll minimize our water use and replenish more of your water than we use,” Smith said of the Microsoft plan.
The Zimmerman and Stroud bills are irreconcilable on renewable energy powering data centers. Zimmerman says his bill allows data center companies to decide how much renewable energy they need and to avoid the sprawl of acres and acres of solar panels or wind farms.
“This limitation would create a situation where renewables could not feasibly power the entire data center, making the use of renewables ineffective for data centers,” Beata Wierzba, director of government affairs for Renew Wisconsin, said. “By limiting our options to generate energy for these large facilities, we are concerned that this bill will not be able to protect consumers from rising costs associated with data center development.”
No data center would come to Wisconsin if it were required to get 70 percent of its power from renewables. “It’s just not reality,” Zimmerman said.
