MON AM News: Regulators reject proposal to have ratepayers share data center power plant costs; Milwaukee Common Council grocery store ordinance draws ire from free market group

April 27, 2026

— State utility regulators rejected a proposal that would have required ratepayers to share the cost of new power plants built for data centers.

Data centers in We Energies’ coverage area will instead be expected to pay the whole cost of new “bespoke” power generation built to serve the energy-guzzling facilities, the Public Service Commission decided Friday.

Members of the PSC also modified the utility’s proposed contract, known as a tariff, to offset transmission costs from being borne by other ratepayers and expanded the length of the proposed contract and the scope of customers to which it would apply.

PSC commissioners at a hearing Friday said having We Energies’ other ratepayers pick up part of the tab for new “capacity-only” generation could create undue harm to existing customers.

“This opened the door to a lot of risk and uncertainty that would impact non-VLC customers,” said Commission Chair Summer Strand, using the abbreviation for the “Very Large Customers” the utility will serve under the tariff.

The tariff will dictate how Microsoft’s Mount Pleasant data center campus and the Vantage data center facility in Port Washington will pay for its power needs and the infrastructure to generate and transmit it.

Microsoft and We Energies praised the ruling.

Brendan Conway, media relations director for We Energies’ parent WEC Energy Group, said the ruling “underscores the importance of our plan to ensure data centers pay their full share for the power we use in our state.”

A statement from Microsoft Senior Director of Energy Markets Jeff Riles said the company “welcomes” the Commission’s approval of the tariff.

“Microsoft has always been committed to paying the costs our operations require, and these tariffs give us a clear path to continue investing in the state while living out that commitment to protect other ratepayers,” Riles said.

Environmental and consumer advocacy groups also released statements supporting the PSC’s ruling.

Clean Wisconsin attorney Brett Korte called the decision “an important and positive moment for the regulation of hyperscale data centers,” adding “families in WEPCO’s territory will have lower bills and cleaner air as a result.”

“How this gets implemented in future rate cases remains to be seen, but customers’ interests are in a better place after the PSC supported critical changes to the utility’s proposal that CUB and other groups recommended,” Citizens Utility Board Executive Director Tom Content said in a statement.

We Energies proposed two avenues for data centers or VLCs to pay for new power generation.

Under one option, known as “full-benefits,” data centers would pay for 100% of the cost of new generation and receive any benefits from that new generation, including excess power sales and renewable energy credits.

Under “capacity-only,” data centers would pay 75% of infrastructure costs for construction, with other customers picking up the remaining 25% of construction costs and 100% of fuel costs.

Commissioner Marcus Hawkins said the “capacity-only” option would frontload costs onto customers.

“We cannot ignore the stranded asset risk this also introduces if non-participating customers are on the hook for 25% of something they may not need,” he added.

Commissioners also approved a modification proposed by PSC staff to how data centers would be billed for transmission costs.

Under a provision known as a minimum billing demand charge, data centers will be required to pay transmission fees equal to their projected power use or their actual use, whichever is higher.

The minimum charge is meant to offset the costs other ratepayers could bear on the upfront costs of already under-construction transmission infrastructure being built for data centers.

Under federal law, utilities won’t actually be able to bill data centers for transmission costs until they start drawing power from the grid, meaning ratepayers may incur some of those upfront costs, but the minimum charge means the cost of new transmission will be recouped from data centers faster.

It also insulates ratepayers from paying more for transmission if data centers fail to meet their projected load needs.

Commissioners rejected a more aggressive proposal that would have had data centers immediately pay the equivalent of their fully online power costs. They raised concern it could tread on federal authority.

Hawkins called the charge a “very minimal step in the right direction,” noting it would not help customers of utilities outside of We Energies’ coverage area, who share transmission costs.

He criticized We Energies’ resistance to the minimum charge, which it had argued in testimony was “not founded in fact or precedent.”

“Choosing to not try and directly argue for the status quo is really disingenuous” given the unprecedented nature of the tariff, Hawkins said.

We Energies has said it will work with transmission utility American Transmission Company and the Federal Energy Regulatory Commission, which regulates transmission costs, to bill data centers for transmission costs once new power lines go into operation.

Commissioner Kristy Nieto said changes to federal rules would be “great” and the tariff could be amended in the future, “but in the meantime we need to make sure existing customers aren’t paying for data center transmission.”

Commissioners approved a minimum contract length of 15 years between data centers and utilities, up from the 10 years proposed by the utility, and lowered the threshold for which the VLC tariff would apply from facilities with 500 megawatts of power demand to 100 megawatts.

They also allowed data centers to subscribe to power sources outside of Wisconsin, raised the credit requirements for data center developers to be exempted from posting collateral for new generation, and said ratepayers would pay a lower return on equity for new generation built for data centers if that generation shifted away from serving the tech facilities.

The PSC will next issue a written ruling formalizing its decisions.

— The Milwaukee Common Council’s recent ordinances on local grocery stores are drawing condemnation from free market advocates, while the state grocers association says it would have preferred “more flexible alternatives.”

The council last week adopted a number of proposals with a stated goal of addressing food insecurity in Milwaukee, after more than a half-dozen grocery stores in the city have reportedly shut down within the last year or so.

Those proposals included one declaring “food apartheid a public health emergency,” and another requiring a 60-day notice to city officials ahead of an impending food establishment closure. Alderwoman Andrea Pratt, who introduced the proposal, said the change will help the city respond with possible solutions in case of a grocery store shutting down.

“Our residents most certainly deserve that courtesy,” she said in a statement.

Following the council’s adoption of these proposals, Citizens for Free Enterprise issued a statement slamming the council’s move, arguing it adds new “costly burdens” to grocery stores operating in the city.

Amy Loudenbeck, the group’s state director in Wisconsin and a former Republican lawmaker, called the council’s package “a direct assault” on the free market.

“Utilizing activist terms like ‘food apartheid’ and creating more regulations and red tape for businesses does nothing to attract or retain Milwaukee grocery stores,” she said in a statement. “The Common Council should focus on ways to improve access and public safety so residents can shop where they live and grocers don’t have to increase prices to cover their losses due to retail theft.”

The advocacy group drew a connection with New York City Mayor Zohran Mamdani announcing the city would start building government-run grocery stores, noting its opposition to expanded government intervention in the grocery industry.

Meanwhile, the Wisconsin Grocers Association took a more balanced approach, noting it appreciates much of the council’s action to advance policies “aimed at strengthening grocery access and neighborhood stability.” The group praises the council’s recognition of grocery stores as essential local infrastructure.

But it also noted grocery operators “work on razor-thin margins” while grappling with volatile input costs, workforce challenges, “intense” competition and other hurdles.

“WGA wishes the Common Council had considered more flexible alternatives to the grocery closure notification ordinance that better reflect the operational realities of grocery stores and reduce the risk of unintended consequences,” the group said in a statement.

Also in its response, the WGA suggests a number of policies for supporting grocery stores, including streamlining licensing, strengthening public safety efforts, holding neighborhood workshops and more. It argues preserving grocery store access demands a balanced approach.

“Investment‑led retention strategies, combined with ongoing collaboration between policymakers, operators, community public safety, and judicial partners, offer the strongest path forward to sustaining neighborhood food access and economic vitality across Milwaukee,” WGA wrote.

See the CFFE release.

— Economist Dana Peterson predicts the closure of the Strait of Hormuz will have long-lasting consequences, telling the Wisconsin Alumni Association “this could take a long time” to resolve even in the best-case scenario.

Peterson is the chief economist and leader of the Economy, Strategy, and Finance Center at The Conference Board. She spoke during the group’s latest UW Now livestream, which was focused on the latest developments in the Middle East.

She warned the “new normal may be more inflationary,” noting it’s uncertain when stability will return to the region amid the ongoing conflict.

Even if the war is declared over tomorrow, oil prices may see a slight improvement but still remain elevated for some time, given the time needed to restart production, move vessels out of the key shipping lane and ensure the safety of the strait for future commercial activity, Peterson said.

“So it’s going to be a while, and I think those who are thinking this is going to fade, and there won’t be big repercussions in terms of inflation and growth are probably too optimistic,” she said.

Meanwhile, Peterson also weighed in on how whiplash policy changes under the Trump administration have “shocked” U.S. businesses, putting them into somewhat of a holding pattern.

“Hence, companies are still just sitting on the sidelines,” she said. “They’re not investing, and they’re not hiring new people. But at the same time, they’re not firing people because they need the workers … and also very few people are quitting, because they don’t know what’s going to happen next.”

Watch the video.

— Anyone looking for the best burger in Wisconsin should go to The Dump — according to the Wisconsin Beef Council’s Best Burger Contest.

The group recently announced The Dump Bar & Grill in Cambria as the winner of the third annual contest, recognizing the business for its Tennessee Whiskey Burger.

“I didn’t believe it at first,” Owner Jack Jones said of his restaurant’s win. “It is very rewarding. I credit our success to small town, Wisconsin values.”

The competition aims to showcase the best 100% beef burgers made in Wisconsin restaurants, based on rankings from a panel of three judges who traveled to the top eight businesses identified in the contest.

The rankings are based on taste, appearance and presentation of the burger, as well as the experience of eating it and other factors such as the restaurant’s atmosphere.

See more in the release, including the other businesses that were reviewed for the contest.

Top headlines from the Health Care Report…

— The UW School of Medicine and Public Health announced Anjon Audhya as its inaugural vice dean for research, tasking him with advancing the school’s scientific endeavors.

For more of the most relevant health care news, reports on groundbreaking research in Wisconsin, links to top stories and more, sign up today for the free daily Health Care Report from WisPolitics and WisBusiness.com.

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