THU AM News: Data center impacts on energy, water infrastructure ‘difficult to assess,’ report says; Grid operator bypasses Dairyland, ATC bids for new power lines

January 8, 2026

— While Wisconsin’s data center boom is expected to drive up energy demand, the Wisconsin Policy Forum says it’s “difficult to assess” just how much these facilities will strain state energy and water infrastructure.

The group yesterday issued its latest report, which is focused on how planned data centers could change the state’s utility landscape as demand for AI drives widespread development.

WPF says the largest “hyperscale” data centers — like the ones being planned around Wisconsin — use up to 1 gigawatt-hours per year. Each facility would use about 1.5% of the state’s total energy production, according to the report.

But authors note these centers aren’t evenly distributed in Wisconsin, with several proposed facilities popping up in small communities where they would lead to an “enormous” increase in local energy use.

“In some cases, this requires a large investment in transmission lines,” they wrote. “In addition, while a single data center may not change the overall power needs of the entire state, given the number of new data centers planned in Wisconsin, they are projected to drive up demand for energy to a point where additional investments in power plants will be required.”

At the national level, data centers used more than 4% of all electricity consumed in 2023, the report shows. That’s expected to rise to between 6.7% and 12% by 2028, based on a federal Energy Information Administration study cited in the report. WPF says Wisconsin is expected to generally follow that trend.

Still, the group notes this rising demand comes amid falling energy sales in the state. Total energy sales by Wisconsin utilities have fallen by 9% since 2005 while peak electricity demand has fallen by 2.6% over the same period.

“Given that planned and potential data centers could require costly utility upgrades, it will be important to ensure those potential costs are fairly distributed,” authors wrote.

The report also explores potential impacts on water usage in the state, noting large data centers have previously used tens of millions of gallons each year. But authors say utilities in the state have billions of gallons of unused water sales capacity, driven by large industrial users either leaving the state or becoming more efficient at using water.

At the same time, data centers are also rolling out new closed loop cooling systems that aim to “dramatically” reduce water usage. Authors note future developments in this area may lead to fewer concerns over water consumption by data centers. But they say some new infrastructure, such as water mains, would need to be built for the new facilities.

They also say increasing water use “actually could benefit customers” of utilities in Wisconsin by spreading infrastructure costs over more gallons of water sold.

“However, to the extent that new water infrastructure is needed to supply these data centers, ratepayer costs could rise unless the data center developer pays for it,” authors wrote. “In some cases, developers appear willing to do so.”

See the report.

— The electric grid operator for the upper Midwest has tapped two out-of-state firms to build high-voltage power lines in Wisconsin, bypassing joint proposals that included ATC and Dairyland Power Cooperative.

The decisions came after the Legislature failed to pass legislation that was designed to give utilities with existing infrastructure in Wisconsin the first crack at building the lines. Conservative groups opposed the bill — dubbed right of first refusal — arguing allowing them to be competitively bid would drive down the cost of the work.

MISO selected Ohio-based Viridon Midcontinent LLC for a 106-mile 765 kV line in southeastern Wisconsin. The company’s bid of $349 million for the work was less than the other three proposals submitted for the line.

The Midcontinent Independent System Operator said in the announcement it had concerns that Viridon had understated the capital costs, but “offered cost containment strong enough to likely ensure the lowest cost to the ratepayer even if its estimated costs rose significantly.”

Meanwhile, it tapped Illinois-based Transource Inc. for a 188-mile 765 kV line in southwestern Wisconsin that starts in Bell Center and runs to the Illinois state line.

Transource submitted two proposals for the line, both just over $1 billion. Another developer had a cheaper alternative at $808 million, but MISO said it selected Transource because it had “unmatched 765 kV capabilities, a robust design that reduces right-of-way impacts, and a clear plan for construction and operations.”

Todd Stuart, executive director of the Wisconsin Industrial Energy Group, praised MISO’s decision. The nonprofit consumer advocacy trade association opposed ROFR.

“Competition works,” Stuart said. “It makes you sharpen your pencils. The selection report speaks for itself. The winning bids had superior cost containment measures to ensure the lowest cost to ratepayers. The winning bids also had the lowest return on equity.”

Dairyland Power Cooperative and American Transmission Co. put in a joint bid on the southeastern Wisconsin line. They also joined with Ameren Transmission Co. of Illinois and Power Cooperative GridLiance Heartland LLC to bid on the project that will start in southwestern Wisconsin.

The MISO announcement listed the overall value for each bid that was submitted for the projects. But it didn’t identify the companies that submitted each proposal.

Each of the submitted bids came in under the nearly $1.5 billion that MISO had projected the project starting in southwestern Wisconsin to cost and the $662 million for the southeastern Wisconsin project.

Ellen Nowak, ATC’s vice president of regulatory and government affairs, said the company was disappointed in the decision, which she predicted would end up costing Wisconsin ratepayers more in the long run.

As part of the company’s push for ROFR, ATC argued the legislation would allow incumbent utilities to spread more of the operational costs of the coming transmission lines over the 14 states that are part of MISO. She said Viridion and Transource won’t have that capability, saddling Wisconsin ratepayers with all the operational costs.

“It’s certainly not the result we wanted, and we think it’s not the best result for Wisconsin ratepayers,” Nowak said.

MISO in late 2024 approved a $21.8 billion investment for 24 projects across the 14-state region that includes Wisconsin with the expectation they will go into service from 2032-34.

— Wisconsin Manufacturers & Commerce is calling for state-level hospital price transparency laws, saying the change would help rein in high health care costs.

But the Wisconsin Hospital Association says the push for these laws relies on flawed information, arguing Wisconsin is one of the “best performing” states in the country for hospital price transparency.

WMC yesterday released a video that says hospital costs in Wisconsin are the most expensive in the Midwest and the fourth highest in the country. Rachel Ver Velde, the group’s associate vice president of government relations and senior political advisor, said hospitals “drive a major share” of health care costs.

“Data shows no clear link between cost and quality,” she said in the video. “Some top-rated hospitals actually charge less. Unlike most industries, patients often don’t know what they’ll pay until after treatment, and prices for the same procedure can vary dramatically.”

She also claimed just 30% of Wisconsin hospitals are “fully compliant” with federal price transparency rules introduced in 2021. That figure comes from a November 2024 report from the nonprofit group Patient Rights Advocate, according to a WMC spokesperson.

Meanwhile, WHA President and CEO Kyle O’Brien says groups pushing for state-level legislation on hospital price transparency are using “outdated and inaccurate information to paint a misleading picture” on this issue.

In a statement yesterday, he noted “not one Wisconsin hospital” has been fined for noncompliance since the federal regulations took effect in 2021.

“This fact is indisputable, Wisconsin is among the best performing states for hospital price transparency in the country,” he said.

The American Hospital Association has previously criticized Patient Rights Advocate, arguing a previous report on this topic from the group “blatantly misconstrues, ignores, and mischaracterizes” how hospitals are complying with federal price transparency rules.

The WMC video also points to a new Colorado law that requires hospitals to post prices and give patients tools to compare prices for procedures, which Ver Velde says “empowers patients” with more choices.

“Wisconsin lawmakers are pushing similar reforms, demanding clear online pricing and penalties for noncompliance,” she said, adding “it’s time to shine a light on costs, hold hospitals accountable, and put affordable care within reach for all Wisconsinites.”

Watch WMC’s video and see the release.

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— The state’s unemployment rate held at 3.1% in November even as Wisconsin’s labor force declined over the year.

The state Department of Workforce Development yesterday released the latest federal jobs figures, showing Wisconsin’s labor force fell by 69,100 over the year to reach 3,116,600 for the month.

Still, state unemployment remained 1.5 percentage points below the national rate of 4.6% for the month.

Meanwhile, Wisconsin’s labor force participation rate fell by 1.9% over the year, reaching 64.1% in November. That’s above the national rate of 62.5%.

See the release.

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