An anticipated data-center boom is driving utility plans for massive natural gas investments in southeastern Wisconsin, raising objections from customer and climate advocates.
Critics say they’ve seen big development plans fail to pan out before, and they don’t want to be stuck paying for overbuilt fossil-fuel generation based on increasingly uncertain growth projections.
Wisconsin Electric Power Co. (WEPCO) says it needs to build new gas generation to power aplanned $3.3 billion Microsoft data center near Mount Pleasant. The project is on the site of the failed Foxconn LCD screen factory, aproposed megaproject that President Donald Trump promised during his first term would become “the eighth wonder of the world” but that never materialized as planned.
“There’s alot of healthy skepticism because of the Foxconn project never reaching anywhere near the scale that was being touted,” said Tom Content, executive director of the Citizens Utility Board. “People are asking, ‘Is this real thistime?’”
Microsoft has already paused construction on the data center as it reevaluates the scope and how “recent changes in technology” may affect the project. AChinese artificial-intelligence company in January announced amajor breakthrough that it claims allows it to offer AI services with far less computing power, upending global assumptions about the industry’s electricity demand.
Microsoft is also proposing adata center in nearby Kenosha, and adeveloper called Cloverleaf Infrastructure is proposing one in nearby Port Washington. But the specifics of these data centers and their energy demand are not confirmed, hence critics say the utility hasn’t demonstrated that demand will increase enough to justify the roughly $2 billion in natural gas investments proposed by We Energies (WEPCO’s trade name). Critics also note that an influx of natural gas power seems to contradict Microsoft’s own climate goals of being carbon-negative by2030.
“We Energies says they want to be ready for other potential customers but has provided no proof of who those customers are or what they want in terms of their energy sourcing,” said Gloria Randall-Hewitt, aresident who spoke at aMarch 25 hearing held by the Wisconsin Public Service Commission. These projects “carry huge price tags in terms of pollution, detrimental health outcomes, and rate increases for customers. They are asking us to just trustthem.”
Big bucks for new gas generation
We Energies is looking to build anew five-turbine, 1,100-megawatt gas plant in Oak Creek on the same site as two large coal plants, one of which is closing this year. We Energies also plans to build a128-MW gas plant in Paris, Wisconsin, 25miles south of Oak Creek. The utility proposes serving the plants with anew liquefied natural gas storage terminal at the Oak Creek plant site, by Lake Michigan’s shore, and with anew 33-mile pipeline.
The Oak Creek gas plant would go online in 2027 or 2028, the utility says, and cost around $1.3 billion. The Paris plant, made up of seven reciprocating internal combustion engines, could go online next year, at acost of roughly $300 million. WEPCO needs the storage terminal, which will cost about $520 million, to make sure the plants and residential customers have enough gas, as well as to meet requirements established by the Midcontinent Independent System Operator, which manages the region’s grid, utility spokesperson Brendan Conway said by email. The new pipeline would cost about $210 million.
The three-member Public Service Commission will decide whether to grant the utility the right to recoup those costs — and aprofit — from ratepayers. After overwhelming turnout at the public hearing on Oak Creek, the commission extended the public comment period for the proposed plant through April 7. That was also the deadline for comments on the storage terminal, and the commission completed acomment period for the Paris proposal earlier this winter.
In an April 1filing before the commission, We Energies said it forecasts 1,800MW of increased demand in the next five years, and even if only 450MW of that demand materializes, building the gas plants is the most cost effective way to meet it. Conway said the Oak Creek gas plant would save ratepayers $413 million compared to other alternatives.
But advocates don’t believe that and hope the commission orders the utility to consider other options and do morestudy.
“We understand there needs to be increased energy production to meet that load, but we want to make sure it’s the most cost-competitive suite of options, not just defaulting back to natural gas as abaseline,” said Emma Heins, principal at Advanced Energy United, an industry association representing transmission, generation, and transportation-related companies.
