The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com.

Microsoft’s data center campus in Mount Pleasant sits on ground assembled for Foxconn. The two projects share the footprint yet differ. Foxconn was subsidy-led: Wisconsin committed billions in refundable tax credits for the promise of jobs and additional investment. The state’s $2.85 billion tax-credit commitment was scaled back to $80 million once it was clear those jobs were not coming. Microsoft purchased the footprint and deployed its own capital. Its own incentive package is modest by comparison, capped at $5 million a year. Its first building is already operational.

This is the general story for data center investment in our state. These companies have invested billions of dollars. Under the Very Large Customer (VLC) tariff, approved by the Public Service Commission (PSC) in April, they are also required to pay the full cost of the power infrastructure built to serve them. Transparency will confirm whether that holds. In a pending request, We Energies has proposed that data centers cover over 80 percent of the cost of generation and storage projects entering rates in 2027 and 2028.

Data centers get blamed for Wisconsin’s electric rates, but our rates were already higher than most of our neighbors before a single data center broke ground.

A regulated utility recovers its fixed costs, such as poles, wires, plants, and storm hardening, over the power it sells. Wisconsin’s electricity sales were essentially flat for two decades. Every dollar of improvement or repair landed on the same base of customers. The result was nine We Energies rate increases since 2013, with two more now proposed.

VLCs change the math. Those costs can now be spread over a larger and growing base of energy users. The alternative isn’t lower prices. Wisconsin already imports roughly 12 percent of its electricity and buys it on a regional market where capacity recently cost $424.30 per megawatt-day, up from $5 in 2021.

Consider. If Wisconsin is hostile to hyperscale load, the load goes elsewhere. With that hyperscaler goes the capital, grid modernization, tax base, negotiating leverage, and the larger base that would have spread cost. Instead, Wisconsin keeps the aging fleet, which it eventually pays to replace anyway, alone.

Transparency and enforceability make rules-based regulation and accounting work, and business should insist on both. The terms should be specific. Cost-allocation percentages that survive an audit. A commission-ordered rider adjusting a large customer’s bill when its actual draw stops matching the forecast. A minimum payment floor on plants built specifically for one customer, so a company’s disappointing result doesn’t become everyone else’s bill. A requirement that the largest customers cut back during the few dozen peak hours a year that drive costs. The contracts should be written so Wisconsin is financially indifferent to whatever happens with the data centers.

Will transparency and enforceability slow us down? Indiana approved a $3.3 billion gas plant conversion in eight and a half months, Louisiana 2,262 megawatts in about ten months, Georgia 1,400 megawatts in five and a half months, all inside Wisconsin’s own statutory clock. Accountability and speed are not a trade.

VLCs care most about speed to power. Wisconsin’s certificate authority over the transmission needed to serve new load therefore gives the Commission a lever over the pace of additional development. The Commission should use that authority intentionally, sequencing new certificates against capacity confirmed built or firmly scheduled. That governs certificates not yet filed. It is not a case against building fast.

Some runway between a load commitment and the generation built to serve it is useful. It’s what pulls new capacity forward. Overextend it, though, and the gap gets filled with more imports.

Treat the VLCs as partners and the larger opportunity is grid, skills, and clean firm capacity that outlast any single tenant.

Two PSC dockets are open for comment: 5-UR-112 through September 18, and 5-ES-113 through September 28. Docket 5-UR-112 is the We Energies rate case, where the cost-allocation terms actually get set. Docket 5-ES-113 is the PSC’s draft Strategic Energy Assessment. Businesses file in these dockets routinely.

Author’s disclosure: I own WEC Energy Group stock, about three percent of my holdings.

Gary Dalton is an independent researcher in Milwaukee. He filed comments in the We Energies rate case, docket 5-UR-112, and writes on energy and infrastructure at werkspc.com.