Hyperscale data centers are exactly what they sound like: massive facilities built to handle enormous volumes of data. They support the growing demand for cloud computing, cryptocurrency, and, increasingly, artificial intelligence.
These large-scale operations can house thousands of servers and require complex systems to manage power, data processing, and cooling. Because they operate continuously, hyperscale data centers rely on extensive energy infrastructure and backup generators to prevent downtime and ensure constant access to data.
Some hyperscale data centers are owned and operated by major tech companies like Meta (Facebook), Amazon, Google, and Microsoft. Others are developed by third-party companies that either sell entire facilities to clients or lease space within them to businesses that need large-scale data storage and computing power.
Wisconsin elected officials have actively encouraged data centers to set up shop in the state. In 2023, lawmakers approved a major sales-tax exemption that lets large data center developers avoid paying state sales tax on much of the expensive equipment they install—meaning millions in lost revenue that could have supported public schools, parks, and other essential services.
At the same time, electric utilities like We Energies and Alliant have been recruiting data centers because these massive facilities use huge amounts of electricity, allowing utilities to justify building new power plants and infrastructure—projects that boost utility profits. This dynamic creates a powerful push to bring in more data centers, even when the public may end up bearing the financial and environmental costs.
Currently, there are no guardrails for data centers, including clean energy requirements, protections for customers of the utilities that will be powering these massive energy users, or limits on water use.
Here are some of the concerns around data centers:
Data centers use a staggering amount of energy. Just two data center proposals (Vantage data center in Port Washington and the Microsoft data center in Mt. Pleasant) would use as much energy as the entire state of Wisconsin. The Vantage data center would use more electricity than the city of Los Angeles. Using that much energy means Wisconsin utilities will have to
- Data centers consume an enormous amount of water. Data centers use an enormous amount of water to keep their servers cool—often millions of gallons every single day for just one facility. As these centers multiply, their combined water demand can put real pressure on local rivers, lakes, and community water supplies.
- Wisconsinites could be left footing the bill. When a single, massive user like a data center comes online and consumes all the power a gas plant produces, or requires new transmission lines to serve it, all ratepayers share in the costs, even though only one customer reaps the benefit.
Data centers can and should be built in ways that minimize these impacts. Data centers should be powered by new, clean energy sources so that the growth of data centers doesn’t exacerbate the climate crisis. Finally, other states have processes in place to ensure that utility customers' bills do not increase once data centers arrive in an area and create a demand for a massive amount of energy.
Banding together for protection from data centers
Community members are banding together and asking their leaders to hit pause on proposals as they learn more, and are calling for protections. Grassroots community groups have formed around proposals for data centers in Caledonia, Port Washington, Janesville, Beaver Dam, Menomonie, and more.
Learn about how community members are pushing back and what the concerns are at an upcoming webinar next Monday, November 24. Learn more and RSVP here.
Big News! Legislation has been proposed by Senator Habush Sinykin and Representative Angela Stroud that would address some of the major concerns about data centers.
The legislation would:
- Require quarterly electricity and water usage reports and proposals (many of the data center owners will not state how much electricity or water they plan to use)
- Requires that the data centers provide good, family-supporting construction jobs if they are going to move forward
- To be eligible for the tax credit, a data center must meet labor standards and use at least 70% renewable energy
- All data centers must be LEED certified or the equivalent
- Data center owners much pay an annual fee that funds renewable energy, energy efficiency, and low-income energy assistance programs
- Requires the PSC ensure large customers like data centers pay their fair share