The Data Center divide — can progress be made without draining resources and patience

By EPN Staff

Republican lawmakers in Wisconsin are seeking to maximize data center benefits while mitigating the energy demands and costs. Data centers are large computer complexes that support artificial intelligence programs and other digital services. They’ve come under fire for the amount of energy they require and the water they use to cool their systems.

Assembly Bill 840, which now awaits a vote in the state Senate, would require data centers to pay for their own electricity infrastructure costs, save water by using closed-loop cooling systems and build on-site renewable energy. The latter provision is intended to limit the necessity of sprawling transmission lines to connect data centers with distant renewable providers. The state only produces 7.2% of its electricity from such sources. 

“Sometimes these data centers attempt to say that they are environmentally friendly by saying we’re going to have all renewable electricity, but that requires lots of transmission from other places, either around the state or around the region,” said State Assembly Speaker Robin Vos, a Republican, at a press conference. ​“So, this bill actually says that if you are going to do renewable energy, and we would encourage them to do that, it has to be done on-site.”

Most Democrats opposed the legislation because data centers are more likely to use fossil fuel sources if they can’t build wind and solar generation off-site or import power from elsewhere inside or outside of the state. 

Why it matters

States continue to grapple with the data center quandary — how to continue development without straining resources. And partisan politics have come into play. As one pollster noted, Republicans are leading the way in navigating the new world of artificial intelligence and data center development, while not ignoring local concerns. Meanwhile, some liberal lawmakers, such as Sen. Bernie Sanders, are making political hay. Two Democratic lawmakers in New York have introduced a bill in the state legislature to put data centers on pause.

In Wisconsin, while utilities cannot increase rates except by order of the Public Service Commission (PSC), the state’s utility regulatory body, the public remains concerned that data centers will increase rates. A new poll by Cygnal found 46 percent oppose a data center being built within 10 miles of their residence, with fewer Republicans (34%) than Democrats (55%) against.  

Republican state lawmakers around the country and the Trump Administration are working to mitigate costs so that the nation can reap the benefits of AI and other digital innovations. 

The Trump Administration recently created a draft voluntary agreement with data center companies to ensure that residential electricity prices are not impacted as they expand. Data center developers would have to pay for all new power generation for their facilities. 

The bigger picture

Until the Wisconsin legislation is passed or companies sign on to President Trump’s compact, it is up to utility companies to contain costs. We Energies, the state’s largest utility, recently sought approval from the PSC to require data centers to pay for both the energy they use and the cost of new generation and distribution infrastructure built to provide them with power. WE Energies intends to increase power generation by 45% over the next five years to support data center growth reports. One of the proposed data centers in its territory will be​ “the world’s most powerful AI datacenter” according to Microsoft. 

Other companies serving Wisconsin, Alliant Energy and Xcel Energy, are proposing to charge special rates for large data centers to shield other customers from rising costs.

Wisconsin has 51 data centers , and seven major data center projects will or have begun construction.