The Public Service Commission of Wisconsin unanimously approved We Energies' tariff for data center-scale customers on April 24, but only after rewriting the parts that would have shifted costs onto everyone else. The commission removed an option under which data centers would have paid 75% of the cost of new generation, lengthened the minimum contract to 15 years and cut the size threshold for the tariff from 500 MW to 100 MW.
"Existing Wisconsin customers should not pay a single cent to subsidize the service of data centers, or very large customers," Commissioner Kristy Nieto said during the more than six-hour meeting, WPR reported. "Not now and not decades from now."
What We Energies proposed
We Energies filed the Very Large Customer and Bespoke Resources tariffs in March 2025, in docket 6630-TE-113, in response to large data center customers entering its territory. The stakes are large. Data centers in Mount Pleasant and Port Washington could double the utility's energy demand by 2030, and the company is preparing to spend $19.3 billion on new generation over five years, according to testimony cited by WPR. The tariff will govern how Microsoft's Mount Pleasant campus and the Vantage data center in Port Washington pay for power and the infrastructure to generate and deliver it, WisBusiness reported.
Under the utility's design, very large customers would fund and subscribe to portions of new generation projects, or to entire projects. It offered two models. Under "full-benefits," a data center pays 100% of the cost of new generation and receives its benefits, including excess power sales and renewable energy credits. Under "capacity-only," a data center would pay 75% of construction costs, with other customers covering the remaining 25% of construction and 100% of fuel costs.
What the commission changed
The commission struck the capacity-only option. "I found the capacity-only option did open the door to a lot of risk and uncertainty as to how it would impact non-(data center) customers," said Chair Summer Strand. Commissioner Marcus Hawkins said the option would front-load costs onto customers. "We cannot ignore the stranded asset risk this also introduces if non-participating customers are on the hook for 25% of something they may not need," he said.
The other major changes, according to the commission's release:
- The minimum initial term for the tariff rises to 15 years, which the commission said prevents cost shifting to existing customers.
- The eligibility threshold falls from 500 MW to 100 MW of forecast aggregate load, bringing smaller data centers under the tariff's protections.
- The utility must revise the tariff to address the risk of transmission costs shifting from data centers to other customers.
- New reporting requirements will show how the tariffs work in practice and bring more transparency to agreements between the utility and its very large customers, with a mechanism for the commission to adjust the terms later.
Transmission was the hardest piece. Federal regulators ultimately control transmission rates, WPR noted, so the commission could act only within its jurisdiction. Hawkins credited public pressure for moving the utility and the transmission owner, American Transmission Co., toward "creative solutions" on the issue.
The commission was careful to define its role. It regulates the rates, terms and conditions of utility service, its release said, but does not regulate the permitting, construction or operation of data centers themselves. The tariff decides who pays for the power, not whether or where a data center is built.
Why approve it at all
Strand said that rejecting the tariff outright "would harm existing customers," because the utility's existing large customer rates do not include protections designed for data centers. The commission's release made the same point: without a new very large customer tariff, large data centers would receive utility service without conditions designed to shield other customers from data center costs.
That framing matters in a state where public opposition was strong. PSC officials said more than 2,000 public comments were submitted, and an analysis by the Sierra Club's Wisconsin chapter found that most opposed the plan as proposed, WPR reported.
"We need to do everything within our jurisdiction to make sure data center customers will pay their own way, fully and transparently, and other customers will be held harmless," Nieto said.
How the parties reacted
The utility and its largest customer both welcomed the decision. A spokesperson for parent company WEC Energy Group said the ruling showed the importance of the utility's plan to ensure data centers pay their full share for the power they use. Microsoft's senior director of energy markets, Jeff Riles, said the company "welcomes" the approval. "Microsoft has always been committed to paying the costs our operations require, and these tariffs give us a clear path to continue investing in the state while living out that commitment to protect other ratepayers," he said.
Consumer and environmental groups were also positive. Clean Wisconsin attorney Brett Korte called it "an important and positive moment for the regulation of hyperscale data centers." Tom Content, executive director of the Citizens Utility Board of Wisconsin, said customers' interests "are in a better place," while noting that how the tariff is implemented in future rate cases "remains to be seen."
What it means elsewhere
Wisconsin joins a growing list of states requiring data centers to carry the cost of the infrastructure built for them, but the details set it apart. Many large load tariffs focus on minimum bills and exit fees. Wisconsin's goes to the generation itself, requiring very large customers to pay the full cost of the plants built to serve them under a 15-year commitment.
"The decisions we're making here today will not be limited to this docket," Nieto said. "They will shape future proceedings, future investments and the trajectory of the utility system itself."
What to watch
The commission's final order will be posted in the coming weeks, followed by the utility's revised tariff and its approach to transmission cost allocation with American Transmission Co. The first subscriptions for bespoke generation under the full-benefits model, and how the costs show up in future We Energies rate cases, will show whether the protections work as intended.