June 01, 2026

Wisconsin’s Data Centers and the Risk of Gas Buildout

Update on the Public Service Commission of Wisconsin written order in We Energies “very large customer” proceeding

By Katie Duckworth, Senior Associate Attorney

From the proposed $15 billion facility in Port Washington to Microsoft’s expanding footprint in southeastern Wisconsin, the state is quickly becoming a hub for major data center developments – with major electricity needs. But who pays for the infrastructure needed to serve these new mega-facilities, and what kinds of energy resources will be built to power them?

On May 21st, the Public Service Commission of Wisconsin (PSCW) issued its written order in We Energies (WEPCO) “very large customer” proceeding, a landmark case that will shape how Wisconsin handles the energy demands and costs of hyperscale data centers for years to come.

Utilities often default to new natural gas plants when facing large new electricity demand. ELPC intervened in this case to ensure that Wisconsin does not lock in unnecessary gas infrastructure when cleaner and more flexible alternatives are available.

What Was at Stake

WEPCO proposed a novel structure to govern how data centers connect to and pay for the grid. The centerpiece is a “bespoke resource tariff,” which requires data centers to pay directly for new power sources that WEPCO builds to serve them, a first-of-its-kind structure in Wisconsin. The concept is sound in theory. If a tech company wants a massive new data center on the grid, they should pay for the new power supply they need.

A critical question, and a reason ELPC intervened, was what kind of generation those dollars would build. WEPCO’s initial proposal would have limited data centers to traditional, utility-scale generation, like large gas-fired power plants. WEPCO’s proposed approach would block the innovative distributed and demand-side solutions – like solar+storage “virtual power plants” – that data centers are already pursuing with utility partners in neighboring states.

Keeping the Door Open for Clean Resources

ELPC argued that virtual power plants (VPPs), demand response, and distributed energy resources (DERs) aren’t just cleaner alternatives – in most cases they are actually cheaper, faster to deploy, and better matched to how data centers actually use energy.

Fossil fuels, on the other hand, are bad for the environment and bad for ratepayers. Gas plants require enormous investments in time and capital. If data center load growth turns out to be overblown (which many analysts believe it may be), Wisconsin customers could be left paying off large gas plants that are not needed. DERs, demand response, and VPPs are no-regrets investments that make the grid run more efficiently regardless of what data center demand ends up looking like.

ELPC also pushed for strong transparency and reporting requirements, so the public and the Commission can understand what generation is being built to serve these data centers.

What We Achieved

The Commission’s order is a meaningful step forward. Rather than accepting WEPCO’s narrower resource definition, the Commission opened the bespoke resource category to the wider range of clean and flexible options as a direct result of ELPC’s intervention. The order also includes transparency and reporting provisions that give stakeholders additional visibility into what gets built.

Notably, even the tech companies themselves footing the bill for these resources want flexibility; two data center developers stated on the record their support for distributed resource options. That opens the door for them to push for cleaner, more innovative portfolios in Wisconsin going forward.

As data center development accelerates across the Midwest, cases like this one will keep coming. And the pattern is already clear. States, consumer advocates, and data center developers want flexibility and innovation. The utility’s job is to meet that demand – not restrict it. Locking these projects into yesterday’s generation technologies isn’t just bad for the climate; it’s bad economics. Expanding the menu of options is how Wisconsin, and every other state in the region, can build a grid that actually works in the years to come.