Last Friday, April 24, the Public Service Commission of Wisconsin (PSC) unanimously approved an electricity rate plan for data centers and other “Very Large Customers” (VLC) in We Energies’ service territory. This decision will protect Wisconsinites from shouldering the financial burden of the energy and infrastructure costs associated with data centers.
RENEW Wisconsin submitted comments in support of this decision to protect Wisconsin ratepayers. We also asked the PSC to include considerations such as energy efficiency and renewable energy in their decision-making process. Meaning these corporations with massive financial means should, at the very least, be investing in building and operational efficiency, while also signing contracts with utility-scale solar projects.
We also highlighted the importance of these large corporations sticking to their own sustainability goals and how, through their vast access to capital, they could incorporate emerging or cutting-edge renewable energy resources to mitigate their contributions to climate change.
As our Policy Director, Andrew Kell, said in his comments to the PSC, “Data centers have adequate resources to become key innovators and provide the ‘technology push’ and ‘demand pull’ required for these programs, technologies, and infrastructure to scale up and flourish.”
While we don’t have guarantees that data centers will lead the charge on innovation as it relates to renewables, we do at least have a strong indication that the PSC will continue to protect ratepayers in future proceedings related to data centers.
“The decisions we’re making here today will not be limited to this docket,” said PSC Commissioner Kristy Nieto. “They will shape future proceedings, future investments, and the trajectory of the utility system itself.”
The PSC also determined that the energy demand threshold for a VLC to qualify for this rate structure should be reduced from 500 megawatts (MW) to 100 MW, the level at which new energy generation projects typically require PSC approval. The PSC also made it mandatory for eligible VLCs to subscribe.
VLCs will also need to fund and subscribe to portions of multiple new power generation projects, or entire projects, as they will be the driver of much of the state’s new energy demand.
We are still waiting for the final written order for this decision, but we are glad that PSC’s preliminary decisions align with what many public comments submitted stated, which is that data centers must pay the full costs of the energy and infrastructure they require.
As data center development progresses, RENEW aims to collaborate with data centers and strongly encourage them to drive and fully pay for cutting-edge clean energy resources. If data centers do in fact strive to incorporate into communities, they should help to ensure that we can create a sustainable, zero-carbon future.