Data Centers Are Coming and Utility Customers Could Pay the Price

Communities around Wisconsin are seeing a surge of interest from developers of data centers. And according to consumer advocates, the stakes are higher than many of the residents realize as utility customers could be the ones who pay the price. 

Tom Content, executive director of the Citizens Utility Board (CUB), says this wave of data centers differs from those many residents have lived near for years. The difference now is artificial intelligence.

“We’ve had data centers for a long time, backing up photos and videos,” Content explains. “But AI is a game changer. The amount of energy needed to make artificial intelligence work is on a completely different scale.”

Content points at southeast Wisconsin as a way to put that scale into perspective. He says since state utility regulation began in 1906, customers of We Energies have collectively used about 5,000 megawatts of power. Two proposed data centers in Port Washington alone could require an additional 5,000 megawatts which effectively doubles historic demand.

“That’s dramatic,” Content says. “And that’s why, as consumer advocates, our radar is up.”

---

Listen to the entire discussion here:

And the concern isn’t just growth – but who pays for it. Those behind data centers are receiving tax breaks. But utility customers could be left absorbing the costs of new power plants, transmission lines, and infrastructure needed to support what will be a round-the-clock energy demand.

CUB is currently involved in regulatory cases involving both We Energies and Alliant Energy. The group is scrutinizing claims that tech companies will “pay their fair share.”

“We trust, but we verify,” Content says. “We know tech companies shop from state to state, and we’ve seen cases where stronger consumer protections push projects elsewhere.”

Water use is another growing concern. Content shares that some data centers are exploring closed-loop cooling systems. But extreme heat, climate change, and indirect water use – tied to new power generation – must all be considered.

“It’s not just the data center itself,” he says. “You also have to look at the water used by natural gas plants, nuclear plants, and other facilities built to serve them.”

One example is in eastern Wisconsin where We Energies has proposed up to $6 billion in new power plants, including solar and natural gas facilities. CUB’s question is simple: how much of that cost should residential customers shoulder?

Content also has questions about transparency. He says some communities have signed non-disclosure agreements with data center developers. It limits what residents can learn about water use, energy demand, and long-term impacts.

“Sunshine is the best disinfectant,” he says. “These projects are being sprung on local communities quickly, and the residents deserve to know what’s being agreed to in their name.”

Some other states, including Minnesota and Oregon, have adopted comprehensive statewide frameworks addressing consumer protection, energy commitments, water transparency, and tax policy before approving data center incentives. 

“Wisconsin,” Content says, “did it backwards. We passed tax breaks first and are now scrambling to protect customers.”

CUB leaders are now calling for a more holistic approach and encouraging Wisconsinites to stay informed. They also warn that unchecked development could amount to utility customers subsidizing some of the world’s wealthiest companies.

“These companies can afford to pay,” Content explains. “What we don’t want is everyday Wisconsinites picking up the tab.”

Resources and reports are available here.