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.
Wisconsin needs legislation that protects our climate, air, water, and pocketbooks from the enormous energy use of data centers.
The Republican majority introduced a bill that purports to protect our water and ratepayers, but it does the opposite. The bill, AB840, the “Poison Pill Bill,” lets Big Tech off the hook as it doesn’t require Big Tech pay their fair share, which means all Wisconsinites could see their energy bills rise, to pay for these data centers.
The bill also requires that any renewable energy used to power data centers must be located on the data center's property. Given the enormous amount of energy that data centers use, this means that only a portion of the energy will come from clean energy – and most of it will be powered by expensive, dangerous fossil fuels. This means more dirty air, backtracking on our climate goals, and higher electricity bills.
Ask Governor Evers and your State Senator to oppose the Poison Pill Data Center Bill today.
The Sierra Club is engaged in the first-of-its-kind Public Service Commission (PSC) proceeding that will create a special rate structure or “tariff” for “Very Large Customers” (VLC), like hyperscale data centers, in We Energies’ territory. This tariff will determine if data center developers pay for their power and infrastructure, or if those costs will land on everyday customers.
The Sierra Club and a broad coalition of organizations are participating in the proceeding, pushing the Public Service Commission to ensure that Big Tech pays the full cost of data centers, from its power usage to the infrastructure created to power the data centers.
AB840 requires that any renewable energy used to power data centers must be located on the data center's property. Given the enormous amount of energy data centers consume, only a portion will come from clean energy. A Wisconsin Watch article gives an example of how infeasible this is:
"For example, the Lighthouse data center — being developed by OpenAI, Oracle and Vantage near Milwaukee — will subsidize 179 megawatts of new wind generation, 1,266 megawatts of new solar generation and 505 megawatts of new battery storage capacity, according to testimony from one of the developers in the We Energies tariff proceeding.
But Lighthouse covers 672 acres. It takes about 5 to 7 acres of land to generate 1 megawatt of solar energy, meaning the whole campus would have room for only about a tenth of the solar the developers promise."
As part of our expert testimony in the docket mentioned above, we introduced a new GridLab report showing that if this bill is enacted and data centers primarily rely on gas plants for power, all Wisconsin residents could see increased electricity bills.
Key findings of the report include:
- Serving large data center loads with gas exposes the whole system — and therefore all ratepayers — to volatile natural gas prices, not just the data centers that will drive the build-out of gas.
- When modeled across low, base, and high gas price scenarios, a portfolio dominated by new gas units has significantly higher operational costs than portfolios that rely more on renewables and storage — with cost gaps ranging from $136M–$559M depending on scenario.
- Adding more renewables and storage reduces exposure to fuel price risk, and even when assuming no federal renewable tax credits, these portfolios still had lower total system costs once fuel risk was accounted for.
- The report concludes that large-load customers (e.g., data centers) can shift financial risk (especially for fuel cost) onto other customers, including households and small businesses.
This report shows that passing AB840 would harm Wisconsinites. In addition to elevated electricity bills, blocking renewable energy development will mean more fossil fuels, and the dirty air, water pollution, and health impacts that come with them. Wisconsin needs to be rapidly deploying renewable energy in order to stabilize the climate and prevent the worst impacts of climate change. This bill prohibits such action on climate change and should not pass.