Wisconsin Approves Data Center Tariffs Requiring Full Cost Recovery

The Public Service Commission of Wisconsin unanimously approved a first-of-its-kind special rate plan for large data center customers served by We Energies. The ruling follows a 13-month review of nearly 4 gigawatts of additional energy demand expected by 2030, primarily from facilities in Mount Pleasant and Port Washington.

The commission modified the utility's original proposal to prevent residential and business customers from subsidizing high-energy users. Key changes include lowering the energy demand threshold for the tariff from 500 megawatts to 100 megawatts and extending service agreements from 10 to 15 years. The commission also rejected a capacity-only subscription option that would have allowed data centers to pay only 75% of power plant costs, requiring them instead to fund 100% of generation and grid infrastructure.

We Energies expects data centers to cover $5 billion in new generation costs and $1.9 billion in other costs during 2027 and 2028. To further protect ratepayers, the commission implemented a minimum billing demand charge and required a tariff rider in future rate cases to allow for adjustments if cost shifts occur. Microsoft, which is developing a campus in Mount Pleasant, and the parent company WEC Energy Group both welcomed the decision, stating it ensures data centers pay their full share while supporting AI investment in the state.