As communities and companies navigate the path ahead for mega data centers in Wisconsin, some say the massive building projects could lead to expansion of renewable energy, a stronger grid and new energy technologies.
“The economic opportunities here are enormous, if we do it right,” Rep. Angela Stroud, D-Ashland, said yesterday during an online event organized by WisPolitics-WisBusiness-State Affairs and the Wisconsin Technology Council. “So using this moment, with some of the wealthiest companies in the history of the world, to help expand our renewable grid to the benefit of the public is something we should really be looking at.”
The virtual luncheon focused on competing data center bills in the state Legislature, the broader opportunities stemming from the industry as well as concerns from opponents that have blocked projects in some Wisconsin cities.
Jason Stein, president of the Wisconsin Policy Forum, echoed Stroud’s remarks on the potential for further renewable investments being driven by the energy-hungry data centers. He noted an individual hyperscale data center could consume about 1.5% of the power sold in the state.
“We can see this investment, this generational investment, as an opportunity to put renewables into the grid, to put reliability into the grid, to experiment with smaller generation … a lot of innovative things can be tried,” he said. “But I think we need to get both the regulatory frame and the technology frame correct.”
Tricia Braun, executive director of the Wisconsin Datacenter Coalition, added “this is the time” for both data center operators and utility companies to look at deploying more efficient-energy systems.
She pointed to small modular reactors, or SMRs, which are being developed as an alternative to the much larger traditional nuclear plants that take years to gain approval and produce energy. They’ve been floated as a possible solution to the energy demands posed by data centers, because the data center energy source could be located on site.
Meanwhile, Stroud discussed the Democratic data center bill, which would establish a separate customer class for data centers under the state’s utility law.
“By having different customer classes, we could partition off data centers into their own customer class, which would mean the [Public Service Commission] would actually have a legal mechanism to try to contain costs,” she said.
She noted this would help avoid energy cost impacts for residential customers, as well as industrial and commercial.
Stroud said she has yet to get a good answer on whether data centers count as industrial or commercial installations. But she added the PSC has said it could use the language included in the Dem bill.
The Republican data center bill, on the other hand, recently cleared the state Assembly and was sent to the Senate. But Dem Gov. Tony Evers has said he’d likely veto the legislation, which is aimed at keeping data centers from passing on their energy costs to others. The bill’s GOP authors were invited to join yesterday’s event but had other conflicts.
Port Washington Mayor Ted Neitzke said both legislative proposals have good elements, and if they were passed into law, the city would largely be in compliance. Construction is underway there on a $15 billion data center project, which Neitzke touted as a revitalizing force for the southeastern Wisconsin community.
The one compliance conflict with the GOP bill, he said, is a requirement that data centers’ renewable energy sources be located on-site. Still, he noted there’s plenty of land there to accommodate that.
Braun said the coalition isn’t backing either the Dem or GOP bill, though she also questioned the feasibility of that on-site renewables requirement in the Republican proposal.
Stroud criticized the competing GOP bill for not being specific on how to prevent energy costs being passed on to other customers.
“The PSC actually needs language, statutory language that they can utilize in their ratemaking processes, and so our bill gives them that language … Unfortunately, the Republican bill just offers vague language that says the PSC should keep customer costs contained,” she said. “They can’t use that.”
While the debate continues in the state Capitol over how to regulate data centers, local governments are taking matters into their own hands. Neitzke said Port Washington was “aggressive” in creating its own approvals for the data center project, and addressed “most of … if not all” of the local concerns.
He said Port Washington had been looking for significant industrial development after the decline of its “proud manufacturing heritage,” noting 80% of its tax base currently is on homeowners and residents.
“Small cities in Wisconsin, if you don’t have significant net new construction, you cannot keep up with your costs,” he said. “So the opportunity for a city is either to ripen or rot … frankly, this is the type of industrial development that a community like Port Washington benefits from.”
He said the Vantage Data Centers project will create nearly 1,000 jobs while supporting public schools and infrastructure, adding “that’s hard to say no to.”
Braun noted the typical hyperscale data center has a $45 million local economic impact, not including tax revenues, and supports 547 jobs on average.
Yesterday’s discussion came after Mount Pleasant recently approved Microsoft’s site plan that reportedly includes 15 data centers. Also this week, the village of DeForest issued a statement that staff determined a $12 billion data center proposal from QTS was “not feasible.”
Watch the video and see more on data center impacts in a recent story.
Register here for another upcoming discussion on data centers in Wisconsin. It’s being held Feb. 5 in Madison by WisPolitics and the Tech Council.
