Will residential customers be forced to pay for data center power lines?

From JSOnline:

Francesca Pica

Milwaukee Journal Sentinel

As more Wisconsin utilities look to hold hyperscale data centers financially responsible for new power plants, regulators are still left to decide a key question: who's paying for the power lines?

On July 16, American Transmission Co. filed plans to shield residents from costs related to Microsoft’s multibillion-dollar data center campus on the former Foxconn site in Mount Pleasant. The power line company serves more than five million customers in eastern Wisconsin, Michigan’s Upper Peninsula and parts of Minnesota and Illinois.

It’s the first in a string of plans to directly assign data center-related transmission costs to the tech companies that own them, according to ATC. These include Vantage Data Centers’ $15 billion project in Port Washington and a data center in Beaver Dam owned by Facebook parent Meta.

ATC is planning more than $2 billion in new high-voltage power lines, substations and facility upgrades to help serve large data centers – an unprecedented build-out for the company. ATC charges these costs to utilities like We Energies, who send them to their customers through energy bills.

We Energies will pay the total cost of transmission capacity a data center requests “even in the event the end-use data center customer fails to materialize or take 100% of the requested service,” according to the proposal. Microsoft must then pay the utility back in full.

“It’s a little bit like a builder. You say, ‘I want a four-bedroom house,’ and it's like, ‘well, I'm only going to use three of them for a while and I don’t want to pay for one quarter,’” said Ellen Nowak, ATC vice president of regulatory and government affairs.

“You asked us to build a four-bedroom house – you’re getting a four-bedroom house and you’re going to pay for the whole house.”

A Microsoft spokesperson told the Journal Sentinel the tech company “remains committed to paying the costs our data center operations require while protecting other ratepayers.”

Regulators previously approved separate electric rate for data centers

In April, the state Public Service Commission modified and approved a separate electric rate for data centers in We Energies’ service area, including the Mount Pleasant project. It’s intended to ensure data centers pay for billions of dollars in new infrastructure needed to serve them.

But unlike new power plants, transmission projects built by ATC are not covered by the data center rate. Commissioners warned that if these costs are not accounted for, they could end up on residents’ energy bills.

We Energies said in April it was working with ATC on a plan to address transmission costs.

Consumer advocates have warned about the cost of the transmission lines throughout the process. They include the Citizens Utility Board of Wisconsin, which represents residents in utility cases.

“Without the large and loud engagement on this topic, I doubt we would have seen the movement we have from the applicant and ATC to evaluate creative solutions to this issue,” Commissioner Marcus Hawkins said in April.

CUB executive director Tom Content said the group will review ATC’s proposal “with an eye toward shielding data center-linked costs from the power bills paid by the residential and small business customers we represent.”

“This proposal goes to the heart of a key issue for CUB, ensuring customers aren’t left holding the bag for billions of costs for new power lines ATC has asked to build to serve them,” Content said. “We had expressed concern in the data center tariff case about how transmission costs were to be allocated and the PSC responded by revamping the original We Energies proposal.”

More data center plans coming, power line company says

ATC says plans for the Port Washington and Beaver Dam data centers will be filed separately.

Meanwhile, the Public Service Commission is ordering retail utilities create a uniform electric rate for all their large data center customers. Commissioners say this will increase transparency and ensure fairness in future projects.

But ATC says agreements for individual projects are in line with its past filings as well as data center plans enacted by transmission owners in other states. The rules for wholesalers like ATC are different, the company added.

“That’s not atypical for us,” Nowak said. “Our agreements are going to be very similar among all of our customers. It's just going to be different inputs, and we have to treat all of our customers similarly and equally.”

In March, Meta, Oracle, Microsoft and other tech giants signed a White House agreement promising to cover all costs associated with their data center build-outs. The Trump administration expanded the nonbinding pledge in July as it seeks to promote AI development.

Meanwhile, data centers are facing growing public backlash. Marquette University Law School's July poll found that three quarters of Wisconsin voters viewed data centers unfavorably, up from 55% in October.

CUB will be watching for future agreements for the other data center campuses, Content said.  

“It's critical to ensure data center developers are paying their full share for the costs needed to serve them, including ‘network upgrades’ that tech companies committed to funding when they signed the Ratepayer Protection Pledge this spring at the White House,” he said.

Cost recovery rules add urgency

Retail utilities like We Energies cannot pass along the cost of a new power plant until it comes online, years after initial approval. But a regulatory exception allows ATC to charge customers for projects that are still under construction.

The new transmission projects for Microsoft’s campus have already been approved by state regulators, totaling $625 million. Two more substations initially built for Foxconn will serve the project and be covered by ATC’s July 16 plan.

A $1.5 billion high-voltage power line for the Port Washington data center is also pending commission approval.

The cost recovery rule means customer protections must be put in place soon, before new projects make their way into electric rates, consumer advocates warn.

We Energies earmarked $620 million in transmission charges for data centers in 2027 and 2028, according to its energy rate plan. State regulators will likely vote on approval of the plan by the end of 2026.

Both the state Public Service Commission and the Federal Energy Regulatory Commission must sign off on ATC's plan. It has been sent to the regional grid operator for review, the company says. It’s expected to come before federal regulators by early August.

Once it’s filed, the federal agency will have 60 days to respond.

Francesca Pica can be reached at fpica@usatodayco.com.

From: https://www.jsonline.com/story/money/business/energy/2026/07/24/will-residential-customers-have-to-pay-for-data-center-power-lines/91024148007/

Data center deep dive: Impacts on energy infrastructure and rate plans, part II

We Energies proposes plan to shield ratepayers from data center power line costs

From JSOnline:

Francesca Pica

Milwaukee Journal Sentinel

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.

From: https://www.jsonline.com/story/money/business/energy/2026/04/10/we-energies-floats-plan-to-cover-data-center-transmission-costs/89212761007/