Dive Brief:
- Wisconsin regulators are considering proposals for two new gas plants that have opened debate over whether the state’s review process can adequately protect the public interest amid the scramble to secure power for the data center boom.
- Chicago-based independent power producer Invenergy is seeking permission to build the 1,186-MW Red Oak Ridge Energy Center and the 324-MW Foundry Ridge Energy Center, both in the southeastern part of the state, for a combined price tag of $2.26 billion. If approved, We Energies plans to acquire both plants outright to serve rising demand from hyperscale data centers, according to regulatory filings; these include a Microsoft campus and a Vantage project leased to OpenAI and Oracle.
- The companies say the plants are part of a mix of intermittent and dispatchable resources needed to ensure reliability for all customers. Environmental advocates argue separate reviews for plant construction and utility ownership leave key questions about major energy investments unresolved until late in the process and could increase the risk of costly fossil fuel assets if projected demand does not materialize.
Dive Insight:
Under Wisconsin’s current process, a power plant developer such as Invenergy seeks approval to construct generating facilities in one proceeding, while a utility’s need for additional capacity and the project’s costs are reviewed separately if the utility later seeks approval to acquire the facility.
Meghan Sovey-Lashua, a Public Service Commission of Wisconsin spokesperson, told Utility Dive in an email that Wisconsin’s regulatory framework differs from states that use long-term utility planning processes to evaluate generation needs.
“[I]n Wisconsin, there is no [integrated resource planning] process currently, and the Commission does not prescribe the type of generation resource power providers retire or seek approval to build,” she said.
Public hearings on the Foundry Ridge proposal took place on July 16. Hearings on the Red Oak Ridge proposal are scheduled for July 23. Written comments will be accepted through July 23, according to the commission’s hearing notice.
The commission has not announced a final vote date on either project or a timeline for construction approval. We Energies’ separate applications to acquire the facilities will undergo a later regulatory review.
The debate has intensified following a policy brief from the Union of Concerned Scientists, which centers on what the organization says is a gap in Wisconsin's regulatory framework for reviewing new power plants proposed to serve large electricity customers.
Maria Chavez, a senior energy analyst at UCS and the report's author, said in an email that by the time a utility must demonstrate public need, “there's already a gas plant set for construction and little opportunity to evaluate cost impacts or other, cleaner sources of electricity.”
The Wisconsin projects come as utilities across the U.S. face rising electricity demand forecasts tied to AI development and data centers. UCS estimates data centers could account for 68% of Wisconsin's projected electricity demand growth by 2030 and says related investments could total about $30 billion by 2050.
A University of Wisconsin-Madison study estimated particulate matter pollution from the plants over their 30-year lifespans could result in more than $1 billion in air quality damages.
Chavez said the cases before the PSC reflect a broader national debate over how to evaluate new generation needs. She described data centers as “stress tests” for electricity regulation and cited proceedings in Michigan and Louisiana as examples of disputes over transparency, regulatory oversight and cost allocation.
UCS says Wisconsin’s two-step review process is “not inherently problematic” and can help speed deployment of clean energy resources. But the group argues the approach can also limit regulators’ ability to scrutinize long-lived fossil fuel investments tied to uncertain data center demand, including whether cleaner or lower-cost alternatives are available.
Chavez said Wisconsin would benefit from an integrated resource planning process that gives regulators a better long-term view of electricity needs before major investments are approved.
“This would protect ratepayers from sudden changes due to singular customers like data centers,” she said, adding that stronger public participation requirements could help ensure utilities remain accountable to the communities they serve.
Invenergy, the company behind the proposed Foundry Ridge and Red Oak Ridge projects, said the facilities are being developed to address significant load increases identified by MISO. The company also responded to concerns about the review process.
“The permitting process at the Wisconsin Public Service Commission is a transparent, tested and thorough approach for bringing all types of energy infrastructure online,” an Invenergy spokesperson told Utility Dive. “With demand set to increase 40% in the next six years in Wisconsin, building a mix of practical, domestic power to keep electricity affordable and reliable for all residents is critical.”
We Energies has proposed to acquire and own the Foundry Ridge and Red Oak Ridge gas projects, according to its applications. In each case, the company says it would own all of the facilities and total generating capacity once construction is complete, if regulators approve the deals.
Earlier this year, regulators approved We Energies’ new data center tariff, which the utility said is intended to shield residential ratepayers from cost shifts associated with hyperscale customers.
Responding to concerns about the project review process, a We Energies spokesperson said regulators evaluate proposed projects “including their costs compared to alternatives, environmental impacts, and importantly, the actual need for these new generation resources,” adding that the process “ensures customers are protected every step of the way.”
“In addition, a significant amount of the new power generation we are investing in is going through the [very large customer] rate and data centers will pay for all the costs associated with the plants purpose-built to serve them,” the spokesperson said.
