Wisconsin’s AI Data Centers Make History…

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Host:

Amy Barrilleaux

Guests:

Ciaran Gallagher, Clean Wisconsin Energy and Air Manager

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Transcript:

Amy Welcome to The Defender, Wisconsin’s environmental podcast. I’m your host, Amy Barrilleaux. The Defender is powered by Clean Wisconsin, your environmental voice since 1970. So it didn’t take long when Wisconsin’s first AI data center was announced just two and a half years ago. We heard promises and pledges from tech companies about sustainability, clean energy, climate responsibility. But before too long, that clean energy talk got quieter and quieter. Fast forward to today. And Wisconsin’s three AI data centers are poised to make history, but not in a good way. In two years, the state has seen seven new gas-burning power plants either built or in the pipeline for approval and construction. Never in the history of Wisconsin have we seen so much gas generation pushed to be built so quickly. And it’s because of just those three AI datacenters, the first phase of Microsoft and Mount Pleasant, the Oracle Open AI Datacenter in Port Washington, and the Metadata Center in Beaver Dam. Those three will use more energy than four million Wisconsin homes. And by the way, we don’t even have four million homes in our state. In this episode, a look at the harmful gas plant boom caused by AI and the cry for help from state regulators who say they’re powerless to stop it. That’s right now on The Defender. The Public Service Commission made headlines recently when it approved construction of two new gas-burning power plants at a time when everybody agrees we need to stop burning fossil fuels. The decision came with an unusual letter from the Commission pleading for new laws. Joining me to talk about what just happened is Clean Wisconsin energy and air manager Kieran Gallagher. Kieran, thanks for being here. Thanks for having me. I mean, I think we all kind of expected the Public Service commission to go ahead and approve these two gigantic gas plants. We were in the middle of this historic fossil fuel build out here in Wisconsin, this historic gas generation moment. When you think about that as somebody who cares about climate change and cares about the health harms of burning fossil fuels in our communities, what’s your reaction to this record-breaking moment we’re seeing ourselves in?

Ciaran Yeah, it is disappointing and a lot of the gas generation that has been approved so far in Wisconsin have all been claimed that they’re peaking plans that they’ll only run maybe 20 percent of the that they’re there to help with the transition to solar and wind, but this is what we need for those coldest days or those hottest days, where you need a little bit of extra generation on the grid. We’re seeing those claims really crumble as Invenergy developer and WeEnergy’s utility in Wisconsin are now starting to propose a really massive gas power plants that are intended to run continuously, 80 to 100% of the hours of the year. And so those plants are the opposite of helping out the grid that is mostly renewables. That is doubling down and really tying all of our electricity generation to really dirty fossil fuel power. There have been some really great studies from UW-Madison researchers that are looking at the health harms of these really massive gas plants. I think for one, the Red Oak Ridge gas plant will result in nearly 100 deaths over. The 30 years of running that plant and over a billion dollars in health costs. And that’s for a plant that’s only going to run 20 percent of the time. Some of these plants that are going to four times that, five times that are going to result in even more health harms. Not to mention the damage to the climate by emitting even more greenhouse gas emissions. So, it’s unconscionable how… These developers and these utilities are continuing to build this generation that is not needed. There are sources that can generate electricity cleanly and support our electricity grid. But they just see the dollar signs. And so they’re willing to put our health and our climate and our future aside to build these and earn more profit.

Amy So I think you talked about a lot of things there. I think what’s interesting to see is there’s this little graph from this draft report that the Public Service Commission did. And it’s just a very basic line graph that looks at energy demand of the state over the last 20, 25 years. And it is going along, largely trending a little bit down, like. You know, stable, maybe to a little bit of less growth in our statewide energy demand up until this year, 2027, 2028, and then all of a sudden there’s this huge jump, like we’ve not ever seen in the amount of energy demand that this state is gonna have. At the same time, you know about 70% of that is data center demand. And at the same you’ve got gas plants being built to meet this growth. And I guess it feels like we’re in this moment where something changed, like a switch changed in Wisconsin. Like we turned on a dime from being in a place where we could kind of manage things, manage the growth, if there was growth, bring on wind and solar when it made sense, get wind and solar from other states through transmission from the West, Minnesota, the Dakotas, places like that, maybe. We were kind of managing things. And now, all of a sudden… What is happening? I mean, does it feel like that? Like you wake up and there’s another gas plant proposed and there is another report coming out that, oh, now this data center demand is going to be this huge amount. I mean it doesn’t feel like we’re talking about numbers and moments that you might be never even predicted a few years ago.

Ciaran I think that’s exactly right. I think the success of our energy efficiency programs with a statewide energy efficiency program called Focus on Energy really helped manage the growth of electricity, even as our state’s economy and GDP were growing, and there was some electrification of buildings in transportation, but. They were largely offset by this energy efficiency. And moving forward, I think we knew that with more buildings and vehicles running on electricity as opposed to gasoline and natural gas, that at least the program we have now wasn’t going to be able to kind of energy efficiency our way out of load growth. And we were expecting that. And we were. Eager to grow our renewable energy sources and the grid in Wisconsin in order to help offset those harmful climate and greenhouse gas and harmful air pollution emissions from cars and buildings. But that was going to be a gradual growth over some time. This centers come on in. Lumpy sums, as they call it, is just kind of thrown all of that, all of our good planning and all of out the window. And the utilities say that the only solution to that massive increase in electricity is a gas power plant that can meet maybe 100% of that data center’s load, and that’s their solution and we just have to accept that. I think that’s the easy solution for them. I think a much harder solution would be to see where can we pull on and maybe get more out of this energy efficiency program? Where can we incentivize customers to install smart thermostats and be part of a demand response program? Where can be build a portfolio of solar, wind, and storage projects that can help offset this data center load. And this whole portfolio of solutions is harder and just has not been truly considered by our utilities. There are processes in other states that mandate the utilities and stakeholders like Clean Wisconsin, like Citizens Utility Board, who represent Wisconsin rate payers and Commission dockets. Come to the table along with our Public Service Commission and kind of put on the table the math of how much their electricity demand is going to grow in 20 years and then also how are they going to meet that. And we get to work together to pull on these elements that aren’t just natural gas polluting power plants. That’s not a tool Wisconsin has. It’s a tool that I think is sorely needed. Especially in this moment. And it’s a tool that we are seeing the commissioners at the Public Service Commission continue to ask for and recognize their own limitations within the Wisconsin law and kind of are asking for help to change these laws so that these other solutions beyond just big massive gas plants can be brought to the table. And evaluated at the same time.

Amy And so you’re talking about the maybe cry for help letter that came or statement from the Public Service Commission when it approved these latest two big gas plans was, well, we just don’t have the tools at the Commission. We don’t the laws that allow us to say no. And that’s true. And it’s quite the stunning admission from a regulatory body to say, help us, basically, to be, you know, it’s kind of like getting a hostage note. Like, I can’t, my hands are tied, please help me, but that’s kind what it feels like.

Ciaran It does. I think it is pretty unusual for the Commission to have a press release with these statements prepared to share as soon as these decisions were made in the open meeting that really are calling for different laws so that they have the authority to make different decisions, hopefully.

Amy Well, because I think when you think about what the scenario that we have been in is you have three AI data center projects, just three, that are causing this ripple effect throughout the state of Wisconsin, really, causing this huge surge in demand. And then our energy utilities, which have, you know, helped bring these big developments here, right, enticed them over saying, we can get you the energy, no problem. No one has insight into that deal except the tech companies, the developers, and the energy utilities. No PSC, no public service commission, no Clean Wisconsin, no CUB. We don’t have insight into these deals that are being made. And that’s the problem, right? We’re just all in the dark, including our regulators with no kind of oversight or plan or anything. And then we end up with, what, seven new gas plants so far, plus three delayed coal plant retirements. I mean, how bad is the situation?

Ciaran I mean, I think seven new gas plants and three coal plants with delayed retirements is a really bad situation for Wisconsinites’ electricity bills and our health and the climate impact. One thing to note is even when the regulators get a little bit of information, so there the public process to approve these these power plants and they’re is information that gets put in that legal proceeding. One of the things that they’re limited in is each gas plant is in its own proceeding, has its own docket, and there is no information that can be shared amongst those proceedings. So even if WeEnergies is saying that we need to build this gas plant because this gas plan is gonna solve this load, the commissioners can’t take into the fact that. If there are six other gas plant proposals that they are dealing with, that can’t even be part of their decision-making process. It is completely siloed, and that is just not a good way to make investments in the state, especially ones that work in concert together. How We Energies manages its electricity relates to its whole portfolio, all of its… Electricity resources, and that’s just not really something that the commission is able to really think about in that decision.

Amy Does it feel like Wisconsin’s kind of in a Wild West moment where there’s no body minding the store and we’ve got these huge, unprecedented energy users coming in, utilities that stand to make about a 12% profit on everything they build to serve these data centers and this kind of gold rush, nobody’s mining the stores, so let’s get everything we can right now If we’re going to worry about climate 30 years from now, who cares?

Ciaran I do think utilities and developers are taking advantage of the fact that Wisconsin does not have good environmental protections and even on the books, even a renewable portfolio standard that we had was met over a decade ago. And, unlike many of our neighbors, that… Have had state legislatures pass these clean electricity standards, increase the renewable portfolio standard, really make strides in saying the future we want is one that protects the health and climate of our state. We haven’t seen that leadership in the legislature. And hopefully, next session, there can be some changes to these laws that I allow the environmental and rate payer concerns of these decisions being made by utilities to be better scrutinized and questioned of the longevity of that investment.

Amy The thing, the mechanism I think that we’re talking about gets called integrated resource planning or IRP. And I think people are kind of shocked to hear that Wisconsin does not have a plan. We don’t have a plant look at our energy system as a whole and to determine what’s needed and what’s not. We have individual energy utilities and they kind of do their own thing and we kind of rubber stamp it and then that’s it. That there is no coherent plan for protecting. The environment, customers, people who pay money for their energy bills, the climate, any of that. Sounds like, since we don’t have it, it’s kind of a hard ask to get one, though. How hard is it gonna be to figure all this out?

Ciaran An integrated resource plan can do all the things, and it also is a common sense, no-brainer plan that puts all of these resources on the table. It can be a tool for certain policies and outcomes that we want, but an integrated resource plan in and of itself doesn’t achieve that without additional clean electricity standards and environmental protection laws. But what this type of plan can do is really allow some much needed transparency in what our utilities are thinking of building or want to build or have near term plans to build and allow us to raise some alternatives like more energy efficiency, like more solar wind and storage and get kind of an economics calculation to show that This is going to be cheaper for Wisconsinites, this is going to be a more reliable electricity system for Wisconsinites, and this results in more prudent investments for our state.

Amy We are seeing this huge spike in demand coming at us like a wall, like a big tidal wave coming. We’re seeing our energy utilities doing the thing that’s gonna make them the most money to do, which is build gas plants, and we’re seeing a public service commission saying we can’t hold back the tidal waves. We don’t have the authority to do really anything. But I guess what needs to happen to salvage as much as we can or save as much we can in this moment.

Ciaran I think we need to go full in on support on these alternatives that don’t have these harmful air pollution emissions contribution to climate change. It’s much harder to come out in support for something than it is to come in opposition, but to really address the air pollution and other environmental devastation that these gas power plants. Could cause is put full-throated support towards the alternatives. Yes, that is energy efficiency, which I think everyone can agree on, but also some more controversial solutions like solar, wind, and transmission, and storage. And these pieces that are increasingly hard to build in our rural landscape but are a much cleaner alternative to this. Seven new gas plants, more delayed coal power plants that cause asthma and heart attacks and worse climate change. And there’s kind of these two futures that feels like we are exactly in that crossroads and we need to put some support against the real projects that are going to combat and generate electricity and replace whatever that gas power plant. Is being claimed, it is needing to generate.

Amy We definitely wanna be in the good future, not the fossil fuel future. And so I think what people listening to this can do in this moment to help ensure that good future is stand up for clean wind and solar projects in their areas, contact state lawmakers when there is legislation that takes on some of these big issues that create some of that badly needed energy planning. Clean Wisconsin has an action network so people can be alerted about things that they can speak out to support. And Kieran, I know you and others at Clean Wisconsin are at the center of some of these. Efforts to determine policies that prioritize Wisconsin’s transition to clean energy. Because I guess there’s work that we all need to be doing in this moment to get our state back on track, right? I think that’s exactly right. Well, Kieran, thank you so much for taking the time to talk with me about this. And we’ll just keep paying attention as these. I know you’ve got like a list of. Gas plants and where they’re at and where they’re coming on. And I think tracking that and paying attention and getting the word out and making sure that the transparency that utilities are not providing is something that we can at least help with, like call attention to what’s going on. So I really appreciate it. Yeah, thanks for the conversation today. And thank you for listening to The Defender. I’ve got links in the show notes so you can join our action network or log on to cleanwisconsin.org/action because your voice matters and can make a difference. And if you have something you want me to talk about or a question or a comment on the show, just send me an email, podcas@tcleanwisconsin.org. I’m Amy Barilleaux, talk to you later.