SB 729

This bill imposes requirements relating to certain electric utility tariffs and to data centers and large energy customers of utilities. In the bill, “data center” is defined as one or more buildings or an array of connected buildings owned, leased, or operated by the same business entity or its affiliate that are rehabilitated or constructed to house a group of networked server computers in one physical location or multiple locations in order to centralize the processing, storage, management, retrieval, communication, or dissemination of data and information. Current law defines “large energy customer” as a customer of an energy utility that owns or operates a facility in the energy utility’s service area that has an energy demand of at least 1,000 kilowatts of electricity per month or of at least 10,000 decatherms of natural gas per month and that, in a month, is billed at least $60,000 for electric service, natural gas service, or both, for all of the facilities of the customer within the energy utility’s service territory.

Required pay rate

The bill provides that laborers and mechanics who perform work to construct or refurbish large-scale data centers must be paid either the prevailing wage rate or, if the laborer or mechanic is covered by a collective bargaining agreement, the higher of the prevailing wage rate or the wage rate under the collective bargaining agreement. Under the bill, “prevailing wage rate” has the meaning given under the federal Inflation Reduction Act of 2022. The bill also defines “large-scale data center” as a data center that consists in the aggregate of at least 25,000 square feet and for which the total cost of construction or refurbishment, investment in enterprise information technology equipment, and computer software incurred within any 60-month period beginning on July 1, 2026, is at least $250,000,000. Under the bill, the prevailing wage rate may not be less than a reasonable and living wage.

The bill also provides that in order for large-scale data centers to be certified by the Wisconsin Economic Development Corporation for exemptions from sales and use taxes, the development, construction, renovation, expansion, replacement, or repair of the data center must meet the prevailing wage requirements and at least 70 percent of the total annual electric energy used by the data center must be derived from renewable resources.

Building requirements for data centers

The bill provides that the owner or operator of a data center must certify to the Department of Safety and Professional Services that the data center has attained certification under one of several specified sustainable design or green building standards. The owner or operator of the data center must make this certification no later than three years after the data center begins operating.

Water usage

Under the bill, a water utility must notify the Public Service Commission if a new customer of the water utility plans to use an amount of water that would account for 25 percent of the total water usage of all water customers of the water utility, or if an existing customer of a water utility plans to increase its water usage to an extent that its water usage will account for 25 percent of the total water usage of all water customers of the water utility.

Under the bill, a political subdivision must require the owner or operator of a data center located in the political subdivision to record and report the actual water usage by the data center no later than one year after the data center is operational and annually thereafter. Once the data center reports this information, the bill requires the political subdivision to report it on its website, if available, or by publishing class 1 notice.

Large energy customer fee

The bill requires the Department of Administration to collect an annual fee from each large energy customer on a schedule prescribed by DOA. The bill provides that DOA must deposit 50 percent of these fees into the utility public benefits fund, which, under current law, funds energy efficiency, renewable energy, low-income energy assistance, and other public benefits programs and must pay the other 50 percent of the fees to Wisconsin Economic Development Corporation for the purpose of supporting the Green Innovation Fund.

Very large customer class

The bill requires PSC to establish by order the definition and appropriate characteristics of a very large customer class or subclass for each electric utility. The bill requires any electric utility that offers a tariff or contract rate to a very large customer to file a rate case application with PSC by April 1 of every other year. In such a rate case, the bill requires the electric utility to provide information, according to rules promulgated by PSC, necessary for PSC to determine the total costs the electric utility incurs, and is forecasted to incur, in providing service to the very large customer under the tariff or contract rate. Considering the information provided by the electric utility, the bill requires PSC to determine if the rates charged to the very large customer are just and reasonable or whether they are unreasonable, preferential, or unjustly discriminatory. If deemed unreasonable, preferential, or unjustly discriminatory, the bill requires PSC to adjust rates or modify the terms of service for the very large customer in a manner appropriate to make the rates just and reasonable.

Renewable resource tariff and reporting

Under the bill, PSC must require each electric utility to offer an optional renewable resource tariff for commercial and industrial customers. The bill requires that such a tariff be offered under a contract that does all of the following:

1. Permits the participating customers to elect to serve some or all of their energy usage from new renewable resources provided that reliability is maintained.

2. Requires the participating customers to pay all proportional costs associated with the addition of new renewable resources to the electric utility’s grid, including any utility costs caused by the addition of the new renewable resources to the grid.

3. Includes an appropriate energy credit.

4. Prohibits the electric utility from shifting costs from the participating customers to other utility customers or vice versa.

5. If the electric utility has an applicable tariff on file with PSC, allows the electric utility to demonstrate that its existing tariff complies with these requirements.

The bill requires an energy utility to submit to PSC quarterly reports identifying certain information regarding each data center within its service territory, including the amount of energy consumed, the fuel type used to generate the energy, the amount of renewable energy generated at the site of the data center, the number of renewable energy credits purchased for the data center, and the amount of energy directly procured for the data center. PSC must publish on its website aggregate data from the reports required under the bill.