We Energies breaks down potential cost to customers in data center proposal
MILWAUKEE (CBS 58) -- People across Wisconsin continue expressing their concern about energy bills growing alongside the arrival of data centers. The Public Service Commission (PSC) of Wisconsin received over 500 comments from residents regarding the topic.
On Thursday, the PSC heard testimony over a proposal from the Wisconsin Electric Power Company (WEPC) that could impact costs to massive power users, and in turn, We Energies customers. The approval of the "Very Large Customer and Bespoke Resources Tariffs" was proposed by WEPC last March and requires approval by state officials.
"Our foundation of everything we’ve tried to do since day one is make sure our other customers are not spending any money to support data centers," shared We Energies spokesperson Brendan Conway.
However, critics have been speaking out, saying the proposal from We Energies says otherwise. The proposal dictates that for "Very Large Customers" using over 250 MW with a contract term of 10 years for gas-only projects, the customer, or data center, would pay for 75% of the construction for system capacity, while other customers, residents, would pay for 25% of the build and all fuel costs.
There's concern that this is on top of already rising electric bills in our state, up around $14 per month in two years. Conway said these increases were approved in 2024, "driven by the cost of new power plants," which included renewable options. There was also a program approved to clear space around power lines and bury some to "strengthen the grid against severe weather." He made a point to emphasize that there are no data centers or any costs going to data centers currently, at least none of the large data centers at the focal point of discussion.
Conway says this is due to rising costs around the country and staying up to date on their systems. "Our costs are going to serve customers. So, we may have rate increases in coming years just because things are going up. We are building new power plants to provide for our customers, aside from data centers."
How much the arrival of data centers could cost regular customers is still unclear. According to the Pew Research Center, in communities that already have data centers up and running, customers' bills were expected to rise by about $17 a month. Data centers and cryptocurrency mining could lead to an 8% increase in the average electricity bill by 2030, according to Carnegie Mellon University. The Environmental and Energy Law program at Harvard University says utility companies, like We Energies, for example, can offer "special deals to favored customers" like a data center and shift the costs of those discounts to regular ratepayers, in order to attract big customers like data centers.
"This is our best plan to make sure no costs are shifted to customers, and we think a really good job, but the Public Service Commission, as part of the process, they can make some changes and improve it. That's great, that’s part of this public process."
Montse Ricossa asked, "If no costs are shifted to customers, why would they pay 25%?" To which Conway responded, "Because we’re increasing the capacity of the system, which is to serve all customers." He went on to explain that as the energy grid system grows, their capacity needs to grow along with it.
Conway emphasized that customers (residents) would receive energy and energy credits from data centers, which could go back to residents as a bill credit. He estimates it could reach around $400 million in the next 20 to 30 years.
The Public Service Commission of Wisconsin will likely continue the hearing into Friday with a final vote expected this spring.