The Northwoods Policy Network (NPN) recently discussed the rise of AI infrastructure and subsequent energy needs, highlighting several solutions and ideas that could help minimize the impact on Wisconsin ratepayers while still realizing the benefits of new technology. Since then, two Wisconsin legislators have identified a set of solutions that we at NPN are particularly excited to see.
Senator Romaine Quinn and Representative Nate Gustafson have circulated legislation that would address three issues. First, the bill removes what is called a Certificate of Public Convenience and Necessity (CPCN) for companies seeking to bring their own power. Second, it removes the ability of utilities to recover rates from electric generation facilities that are closed – directly addressing Wisconsin’s “stranded asset” issue. Lastly, the bill creates a permitting dashboard available to the public to track the process of approvals or delays. NPN will be reviewing each of these topics.
Topic 1: the removal of the CPCN for companies to generate power behind-the-meter (BTM) or, as we like to view it, Bring Your Own Power (BYOP).
Encouraging self-generated power protects ratepayers
Current state approval processes slow development
Decentralized power could unlock economic growth in northern Wisconsin
While President Trump announced a ratepayer protection pledge, calling on large tech firms to produce their own power at their own expense, state policy still plays a significant role in the actual implementation of the policy. In Wisconsin, BTM generation has typically been reserved for specific manufacturing and mining operations. If desired, companies would have to apply for a CPCN from the state’s Public Service Commission. This long, arduous process is prone to external influences and needlessly costs time and capital.
The simplest way to ensure that rates are not increased by large users like AI data centers is not only to allow but also to encourage companies to bring their own power. The benefits of this legislation are immense. In our region, infrastructure (or the lack thereof) has defined much of our destiny. Expanding and accelerating the process of companies producing their own power will undoubtedly increase potential opportunities in the Northwoods. Today, data centers can be built in roughly 18 months; however, it can take 5-10 years for them to receive power.
Lack of high-voltage lines and adequately sized substations has cost the region untold amounts of opportunity. This opportunity cost cannot be measured, as we will never know “what if?” However, the region should be supportive of this new direction and begin asking, “Why not us?” While the critical focus of this momentum revolves around data centers, we know that expanding electricity availability through new decentralized approaches will benefit manufacturing, natural resource extraction, or refining.
Behind-the-meter options are plentiful for companies to pursue. Rapid advances in nuclear energy, especially around Small Modular Reactors, offer compact and dense options. In the north, expanding biomass options for our plentiful, underutilized logging industry come to mind. Retiring coal plants, natural gas, and renewable sources under the ownership and control of private companies can bring the power to the right places with no cost impact to residents.
Long-term, this direction points the state in a promising direction. Wisconsin can capture the investment and technological opportunities – and all the jobs that come with it – without worrying about its utility rates doubling. Industrial parks can be more than wide roads with large lots. Companies can now co-locate and connect to one another to ensure that access to electricity is never an issue.
Without allowing this co-location and self-generation, the risk of utilities offering special rates and infrastructure upgrades to large users is high. Without incredible transparency, it is difficult to know if rates are going up more due to these buildouts or just following the trend of ratepayer hikes.
NPN will continue this analysis by next covering the issue of “stranded assets” and this bill’s actions to ensure utility companies cannot collect rates from decommissioned, unproductive power plants.
