Francesca Pica
As artificial intelligence data centers are being built in eastern Wisconsin, so too is a massive network of new power lines to serve them.
The American Transmission Company is seeking more than $2 billion in transmission projects that will help serve Microsoft's massive Mount Pleasant campus, Vantage's project in Port Washington and a data center in Beaver Dam built by Meta, parent company of Facebook and Instagram.
Microsoft, Meta and other tech giants have publicly pledged to pay for new power lines supplying their electricity-hungry data centers. But due to the way ATC’s billing works, ratepayers in eastern Wisconsin could face higher costs for transmission lines in the years before campuses go online.
In public filings submitted to state regulators April 1, We Energies says it plans to ensure transmission costs are transferred directly to data center companies in their service territory. The move is intended to shield other ratepayers from hundreds of millions of dollars in extra transmission costs associated with data centers while those projects ramp up.
The utility said it’s working with ATC to submit a plan to federal regulators by the end of April.
The proposal would protect not only We Energies customers but ratepayers across ATC’s footprint, said Bert Garvin, WEC Energy Group senior vice president of external affairs. That includes Alliant Energy and Wisconsin Public Service Corporation territory in eastern Wisconsin, as well as customers in Michigan’s Upper Peninsula.
“That was important to us and to the data centers,” Garvin told the Milwaukee Journal Sentinel. “No other utilities’ customers will be paying for this lag issue as they ramp up.”
In Wisconsin, transmission is one of the “loopholes that would need to be fixed if the world was going to live up to the promises" made by data center companies, said Tom Content, executive director of the state Citizens Utility Board.
Content said he was glad to see We Energies address transmission cost concerns, but is waiting to see specifics of the proposal filed to regulators.
"We have all these promises that the tech companies are going to pay their own way," he said. "We don't have anything in writing today in this case that protects customers from $2.3 billion in costs."
ATC seeking more than $2 billion in new transmission
The state Public Service Commission already signed off on two transmission projects related to data centers.
Part of a $625 million project that was approved in May 2025 includes the construction of a power line to serve Microsoft’s data center campus in Mount Pleasant, built on the former Foxconn site.
In public filings, ATC said the project’s massive energy demand – around 900 megawatts for the first two phases – will overload existing infrastructure.
ATC is also building two new power lines and a substation in Milwaukee and Waukesha counties. The project will cost $423 million and help maintain system reliability as large data centers come online.
Another transmission project, approved in November 2025, will cost $191 million. It will serve Meta’s Beaver Dam data center.
ATC is awaiting approval of a massive proposal to hook up the Port Washington data center campus. It would cost an estimated $1.4 billion to $1.6 billion. ATC also wants to build a $56 million power line in Milwaukee and Racine counties, in part to support the Mount Pleasant campus.
Lag, lower-than-expected energy use could expose residents to higher costs
ATC bills though utility companies, who pass costs onto their customers in rates.
Transmission accounts for around 15% of a We Energies customer's monthly electric bill, Content said. And unlike utilities – which must wait for a power plant to begin service before putting costs into rates – ATC can start charging as soon as shovels break ground on a new power line or substation.
As part of its data center rate proposal, We Energies wants to charge data center companies a transmission service charge once they go online. It would be based on how much energy they use, regardless of whether they meet their projected load.
But that means We Energies would recover fewer costs if data centers used less than expected, Public Service Commission analysts said.
"Put another way, when [data center customers] are charged less through the Transmission Service Charge due to changes in actual demand and energy usage, ATC's other customers will be charged more to make up the remaining transmission costs," analyst William Koebel said in January.
Koebel also said other customers may subsidize data center-related transmission costs in the gap between project approval and when the data center enters service. That gap could last around three to five years.
We Energies plan shields ATC ratepayers from $561 million in costs
To address the lag issue, We Energies says it will enter a service agreement with ATC to directly assign costs to data centers during the construction and ramp-up period.
We Energies says this will save ratepayers in ATC’s footprint around $561 million through 2028.
If approved, We Energies customers will avoid $130 million in extra costs in 2027 and 2028, according to the utility’s electric rate proposal filed April 1.
A spokesperson for ATC said the company continues to work with utilities on ways to assign costs to “large load customers,” including data centers.
“Under the concepts being considered, a large load customer would pay the financing costs of transmission facilities while under construction,” the ATC spokesperson said. “Also, customers would be charged for the full amount of transmission service for new, large loads they request, at the time they request it to be available, for a minimum period of 10 years regardless of when and if the full load shows up.”
The plan would be submitted to the Federal Energy Regulatory Commission, which oversees transmission rates. As part of that process, the state Public Service Commission will likely weigh in on whether the proposal adequately addresses the lag issue.
Francesca Pica can be reached at fpica@usatodayco.com.
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