Stroud says previous session bill pushing data centers to use renewable energy ‘starting point’ for next session

Rep. Angela Stroud said a bill from last session pushing data centers to use renewable energy will be a “starting point” for Democrats as they draft new regulations for the electricity-intensive facilities.

She also told reporters at the state Capitol that Democratic lawmakers “will be ready” to pass legislation bringing down utility costs and protecting ratepayers when the new Legislature convenes in January.

Stroud, D-Ashland, co-authored legislation with Sen. Jodi Habush Sinykin, D-Whitefish Bay, last session that would have required data centers to draw at least 70% of their power from renewable energy sources to qualify for an existing tax exemption and pay prevailing wage rates or union-negotiated wages to workers on a data center construction project. 

The legislation, AB 722 and SB 729, also required large power users to pay into a public benefit fund supporting energy efficiency, renewable energy and low-income energy assistance. And it instructed the Public Service Commission to codify very large power customers as a separate class of ratepayers. 

“We know that we have consensus on everything that’s in that bill but things have changed a bit. There are things that are going to be added to that bill, version 2.0, coming into next session, and details on that remain to be seen,” Stroud said.   

Since the end of the legislative session, the PSC has approved a proposal from one investor-owned utility, We Energies, to serve data centers and other large customers as a separate class. Several other utilities have submitted their own proposals governing how they would bill data centers. 

Sen. Romaine Quinn, R-Birchwood, who authored a competing data center regulation bill last session, criticized the idea of Dems’ using Stroud’s bill as a template. He also blamed Gov. Tony Evers and Democratic appointees to the PSC for utility rate increases. 

“If Democrats are being honest about data centers, the bill I authored should be the starting point. That bill would have protected ratepayers and preserved our water and farmland,” Quinn said.

The bill, SB 843, which Quinn coauthored with Rep. Shannon Zimmerman, River Falls, did include restrictions on cooling water usage not present in the Stroud-Sinykin bill. It would restrict land usage by requiring wind or solar facilities principally serving a data center – but not other power sources – to be located on-site.

That bill also called for PSC to ensure that ratepayers do not bear new utility costs associated with data center development but did not specify how the commission would do so. The PSC at the time testified it lacked the regulatory authority to guarantee this.

Stroud said she expected lawmakers on both sides of the aisle to support allowing state regulators to do long-term planning for utility infrastructure rather than evaluate new power plant proposals on a case-by-case basis.

Environmental advocates and watchdog groups like the Citizens Utility Board of Wisconsin – and PSC commissioners themselves – have advocated for Wisconsin to adopt integrated resource planning, which would allow the regulatory agency to forecast the state’s energy needs and pick what kinds of infrastructure will power the state.

PSC Chair Summer Strand last week complained publicly that legislative Republicans had left the PSC “hamstrung” by failing to approve IRP. 

“I think everybody supports that. Republicans support that. That’s really a boilerplate position that we should have had, we will have going forward,” Stroud said. 

Other speakers advocated for cutting utilities’ guaranteed profits, imposing a 2-cent-per-kilowatt-hour surcharge on data centers’ power usage to subsidize other ratepayers’ power costs, and a pivot to clean energy. 

CUB Executive Director Tom Content called for utility profits to be tied to affordability and ratepayers’ energy burden and argued Wisconsin’s investor-owned utilities were earning profits far in excess of their operational need.

CUB pushed for cuts to We Energies and sister utility Wisconsin Public Service’s return on equity when the utilities asked the PSC to raise rates this year. The PSC cut that profit margin, though not by the degree requested by CUB.  

An August analysis by the National Resources Defense Council found a 1.5% reduction in utilities’ return on equity and the 2-cent-per-kilowatt-hour surcharge would save residential ratepayers an average of $383 per year by 2028.