In Madison, Wisconsin, Microsoft and local ratepayer advocates are urging the Federal Energy Regulatory Commission (FERC) to stop a proposal that would allocate the cost of new transmission infrastructure for the company’s Mount Pleasant data center to other electricity customers. Both sides contend that the plan, put forward by We Energies and the American Transmission Company (ATC), does not adequately shield ordinary households from the financial burden of the project.
Background on the proposal
The utilities’ plan sets a minimum transmission charge for Microsoft based on the data center’s projected electricity use. ATC estimates it will spend more than $500 million upgrading the facility’s grid connection, and the utilities intend to recover that expense through a 15‑year billing arrangement that would pass the cost to Microsoft, who would then pay ATC for the projected transmission capacity.
We Energies argues the minimum charge protects its broader customer base by preventing them from subsidizing over‑built infrastructure if the data center consumes less power than expected. The arrangement follows a “cost causer, cost payer” methodology that the utilities say is a standard customer‑protection mechanism.
Microsoft and consumer concerns
Microsoft, however, says the utilities filed the plan without consulting the company, risking delays in interconnection and operation of the new infrastructure. The company also points to its recent commitment under the White House’s Ratepayer Protection Pledge to pay for all new power‑delivery upgrades required for its data centers, ensuring those expenses are not passed on to ordinary households.
Attorney statements highlight several perceived flaws: an early‑termination fee that could force Microsoft to pay “excessively more” than the remaining value of the transmission assets, and a lack of transparency that could lead to future litigation. The Citizens Utility Board (CUB) echoed these concerns, noting that the proposal bases minimum charges on ATC’s standard interconnection rates, which may underestimate the true cost of data‑center transmission needs.
Regulatory landscape
The Wisconsin Public Service Commission (PSC) cannot compel ATC to bill data‑center developers for the full cost of new transmission lines; only FERC has authority to overhaul billing rules for interstate transmission. The PSC did approve a workaround earlier this year, requiring We Energies to set minimum charges for large data‑center customers based on projected electricity use, but the current ATC proposal seeks a one‑off approval from FERC.
Microsoft has asked FERC to refer the entire proposal to a settlement judge, creating a venue for all parties to address their concerns, or to reject the plan outright. CUB is urging the commission to develop a uniform transmission cost allocation process for all large data centers in ATC’s service area, including facilities in Port Washington and Beaver Dam.
Potential impact on Wisconsin families
Transmission‑related costs currently represent about 10 % of a typical Wisconsin electricity bill, according to We Energies. If the ATC plan proceeds as written, there is a risk that those costs could be spread across a broader customer base, effectively raising monthly bills for families who have no connection to the data center.
Both Microsoft and consumer advocates argue that protecting ratepayers aligns with the broader goal of ensuring that the benefits of high‑tech investment do not come at the expense of everyday households.
Next steps
ATC has not yet responded to the complaints, stating it will address the issues through the established FERC process. The outcome of this regulatory dispute will shape how future data‑center projects are financed in Wisconsin and could set a precedent for other states grappling with the cost of expanding transmission infrastructure for large technology facilities.
Original reporting: Wisconsin Watch — read the source article.
