Wisconsin lawmakers have passed a bill that aims to protect ratepayers from cost increases tied to data center expansion.

The Wisconsin State Assembly passed AB 840 by a vote of 53-44. The bill sets out several protections for ratepayers, including preventing data center operators from passing their energy costs onto residential consumers and requiring data centers to pay for their own generation and transmission infrastructure, stopping ratepayers from subsidizing the infrastructure.

In addition, the legislation has several provisions aimed at water use within the sector, requiring data centers to use closed-loop water systems for cooling, annually report their water usage, and file a bond or security to cover the cost of any required reclamation. Finally, the bill orders data centers to bear the costs of land reclamation.

The legislation now heads to the state senate for consideration. The bill was proposed earlier this month by Representative Shannon Zimmerman (Republican-River Falls) and Senator Romaine Quinn (Republican-Birchwood).

Reaction amongst Wisconsin lawmakers was mixed. Zimmerman stated: “Data centers are becoming a foundational component of today’s economy. They are essential in powering the Internet, artificial intelligence, cloud computing, and mobile communications.

“However, it has become clear that we must strike a balance that protects affordability for ratepayers. My bill protects Wisconsin families by ensuring that data centers pay their own way.”

Some Assembly members, however, voiced dissent. State Representative Amaad Rivera Wagner (D-Green Bay), who voted no on the bill, stated: “According to testimony, AB 840 fails to protect ratepayers from increased utility costs associated with large-scale data center development. Every union representing the men and women who live and work in Green Bay has come out in opposition to the bill.”

She went on to contend that the bill was rushed, with the Republican majority in the Assembly fast-tracking the bill in less than a week. Instead, she called for greater collaboration across party lines and regions of the state. “We should be bringing stakeholders to the table, not sidelining them. We should be finding pathways to collaborate on an issue that affects rural, suburban, and urban communities alike,” Wagner added.

The bill is the latest to pass through a state legislature, with several other states passing similar bills with the intention of protecting ratepayers from higher electricity bills.

Ohio was one of the first states to pass legislation to this effect, with the Public Utilities Commission of Ohio (PUCO) approving a new rate class in July. It requires new data center customers in Ohio to pay for a portion of their energy requests, even if they use less, to cover the cost of the infrastructure required to bring electricity to those facilities.

Before this, in April, the Oregon House of Representatives passed a bill that granted regulators the authority to consider which customers are the primary beneficiaries of new infrastructure and allocate costs accordingly.

Following this, in September, Virginia’s main utility Dominion Energy proposed a new rate class for data centers, applying to utility customers who consume more than 25MW of energy and have a monthly load factor of more than 75 percent. If passed, it would require many, if not most, of the states' approximately 450 data centers within its coverage zone to be classified in the new customer class.