(The Center Square) – Increased energy use from artificial intelligence data centers in Wisconsin will have a cost.
But the question is whether those costs will reach the residential utility payers on their home electric bills.
“And the tech companies are saying the right things and the utilities are saying the right things,” Citizens Utility Board of Wisconsin Executive Director Tom Content said at a recent Wisconsin Technology Council panel on data centers. “All of our commission chairs are saying the right things that the cost causers are meant to pay.”
A big part of the reality is capacity, how much energy data centers need and how much the state’s utilities have to offer.
Alliant Energy’s Becky Valcq explained that utilities have constant infrastructure costs to ensure that the lights turn on when someone flips on a switch at their home or office. Having new large-scale customers like data centers that pay a large portion of infrastructure costs through their payment agreements with utilities can then offset those ongoing costs, which are a large portion of the bill that consumers pay.
“When we talk about growth, from a utility perspective, especially a utility that has a largely rural service territory, growth is good,” said Valcq, Alliant’s assistant vice president of regulatory affairs and data center services. “Why is it good? It’s because of all those fixed costs that we have regardless. The more customers we bring on, the lower those fixed costs are for all of our customers.”
Power capacity, however, is a large issue in the matter. Data centers in Port Washington and Mount Pleasant alone will use more energy than the rest of the consumers in the state.
It’s why Wisconsin leaders are pushing tax breaks for new nuclear plants.
Content explained that it took 120 years for We Energies to grow from 1 kilowatt to a gigawatt to five gigawatts of energy capacity but these two data centers will double that capacity need in a few years with more large-scale data centers coming, like a Meta data center in Beaver Dam.
“We’re in this inflationary environment already and now here come data centers,” Content said. “The utilities do have an obligation to serve and it’s always a question of at what time is the system ready for this project and can the system accommodate it?”
Data centers are expected to lead to the average American’s energy bill increasing from 25% to 70% in the next 10 years without intervention from policymakers, according to Washington, D.C.-based think tank the Jack Kemp Foundation.
The data centers are being brought in and given large-scale tax benefits, such as incentives negating property taxes along with sales taxes on everything from construction to servers to electricity, without the promise of many new employees and question marks on the lifespan of the developments.
“If you were trying to design the dumbest possible thing to subsidize, it would be a data center,” Center of Economic Accountability President John Mozena recently told The Center Square. “They are these big, dark buildings where virtually nobody works. Most of the high-value work at those facilities isn’t being doing by people on-site, it’s being done programmers in Silicon Valley or Shanghai or Mumbai or someplace like that.”
