Where to Listen:
A Clean Wisconsin analysis shows just two approved data centers in Wisconsin will use more power than all the homes in our state combined. More than the generation capacity of the Point Beach nuclear plant, the single-largest source of power in Wisconsin. And that leaves a lot of people are wondering, where is all this leading us? What will it mean for Wisconsin’s precious water resources, our land, our energy bills? And why is it so hard to find out? In this episode, an in-depth conversation on the secrets of data centers.
Host:
Amy Barrilleaux
Guest:
Michael Greif, Midwest Environmental Advocates
Resources for You:
AI data centers in Wisconsin will use more energy than all homes in state combined
Large Wisconsin data center tax breaks make benefits unclear
MEA Takes Legal Action to Compel City of Racine to Disclose Data Center’s Projected Water Use
Transcript:
Amy Welcome to the Defender, Wisconsin’s environmental podcast. The Defender is powered by Clean Wisconsin, your environmental voice since 1970. I’m Amy Barilleaux. Chances are you’ve seen some headlines lately about data centers in Wisconsin. The Midwest is suddenly a hotspot for AI data center development, and it makes sense. We are at the center of the largest freshwater system in the world, our Great Lakes, and we have plenty of open land because of all the farming. But a new analysis from Clean Wisconsin reveals the scale of energy demand these AI data centers are gonna need. Just two of them, the full build out of the Vantage data center in Port Washington and phase one (only) of the Microsoft data center in Mount Pleasant are gonna need 3.9 gigawatts of power. Let’s put that in perspective. That’s far more power demand than all of the homes in Wisconsin combined. It’s more than three times the power generation capacity of the Point Beach Nuclear Plant, the single largest source of power in the state. And a lot of people are wondering, where is all this leading us? What will it mean for Wisconsin’s precious water resources, our land, our energy bills? And why is it so hard to find out? An in-depth conversation on the secrets of data centers. That’s right now on the Defender. How much water is the Microsoft Data Center under construction right now in Mount Pleasant, just down the road from Racine, going to use? Sounds like a simple question, but the answer proved pretty hard to get. It took a lawsuit. And maybe that’s not surprising because utilities, local communities, and developers are very tight-lipped when it comes to these projects, often signing non-disclosure agreements that shield information from communities. Joining me is Michael Greif with Midwest Environmental Advocates, the legal nonprofit that filed a lawsuit against the city of Racine to get that water use information. Michael, thank you so much for being here.
Michael Yeah, of course. I’m happy to be here.
Amy I think there are a lot of issues going on with data centers, but a big one is transparency. So it’s hard to know when a data center project comes to town how much energy it’s going to use, how much water it’s gonna use, where that energy is gonna come from, where the water is gonna from. So all the things that I think developers may know. Are you surprised that that kind of information isn’t typically readily available for communities when there’s a project proposed?
Michael I think it is surprising at first blush when you’re a community member and a huge development is proposed for your neighborhood or your community. You expect that public officials are going to be providing information on that. You expect if you show up to a common council meeting there’s gonna be opportunities to share your thoughts and discuss all the impacts and how it might impact your community And what typically happens both nationwide and here in Wisconsin is hyperscale data center developers and tech companies, they use non-disclosure agreements to hide things from either their competitors or from the public, things that they don’t want out there in the open. And There might be very valid business reasons why they want things to be that way, but on the other hand, there’s the interest of the community in assessing and understanding how they’re going to be impacted by these truly enormous facilities. Um, so I think it is surprising the, the lack of transparency around some of these developments, oftentimes a community member can’t even figure out who is going to be building the giant data center down the street from them. And that’s because the non-disclosure agreements are frequently used to hide who the entity behind the data center is.
Amy And I think this is really interesting because you talk about communities. A lot of the decision makers for these data centers are just local boards and places like that. So what incentive would they have to sign a non-disclosure agreement with a data center? Why would that even be a thing in the first place?
Michael Yeah, local communities largely see this as an economic development opportunity. I’m not going to say that these projects don’t bring anything to the local community because often they do bring significant tax base, tax revenue for the community, and I think local officials often see them as a huge bonus in that sense. So the degree to which a small city or town wants a data center to come there for the economic development opportunities, they might be willing to go along with some of the demands to sort of incentivize that facility to locate to their community. And something we’ve seen in Wisconsin generally is elected officials sort of at the state level and locally have been pretty supportive of incentivizing these facilities to locate to Wisconsin. The legislature passed and the governor signed a sales tax exemption for these facilities so that when they come here and they build a hyperscale data center, they don’t have to pay sales tax on a lot of the equipment that goes into that facility. And that is, really, that was passed just in 2023. And I think that’s really around the time we started to see the investment in the state tick up. And just today, Governor Evers announced that Microsoft is gonna be continuing to invest in the Mount Pleasant area. And that press release from the governor really focused on the economic development and sort of jobs associated with these facilities. And that might all be well and good, but there’s still downsides to these facilities, whether it’s local impacts, whether its energy use, um, whether it’s impacts on rate payers who are seeing their energy bills go up. And all those things should be discussed out on the open before these projects are approved.
Amy You talk about kind of the rolling out of the red carpet for these data centers, not just from local communities, but also from our energy utilities. And it’s looking like there’s kind of a disconnect between how our local leaders may be talking about data centers and how just folks out in the community are talking about them. Because, you know, Clean Wisconsin, we had that analysis that showed what the scale of the energy use of some of these data centers is going to be. And we posted one sentence about it on our Facebook page. And the response was almost overwhelming. It’s like we had opened a floodgate. And typically, when you get 800 or 900 comments on a social media post, a lot of those will be people arguing back and forth, you know, like just kind of divisive comments back and forth aimed at each other. But this really by and large was not like that. Like these were people who were angry about data centers, about energy use, about water use, about transparency. Are you surprised that there’s this kind of current of frustration in a lot of Wisconsin communities?
Michael I’m not surprised. These facilities are being built and funded by some of the largest wealthiest corporations in the world. And like you said, they are having the red carpet rolled out for them. They are being provided with tax exemptions that you and I wouldn’t be able to get. You know, if you and I want to go out and buy a computer or a laptop. We have to pay sales tax on that. But when Microsoft fills a huge warehouse filled with rows and rows and row of computers, they don’t have to paid sales tax that. So I think there’s a sense of injustice there. I think, there’s also a feeling that these facilities are going to cost our communities something. Whether it’s people seeing their energy bills going up as a response to these, or it’s seeing prime farmland taken up, or its dealing with local impacts like air pollution, noise pollution, light pollution, not to mention the water use of these facilities. I think communities have a sense that they are going to be impacted in some ways, maybe positive, whether it is their jobs or tax base. But also in a lot of negative ways. And ultimately, I think people respond to a sense that they don’t want to be paying for the benefit of these huge tech companies that aren’t from Wisconsin, and they’re largely coming here to take advantage of the resources we have, whether it’s ample land or water for them to use. And they just want to see a fair treatment across the board. They don’t want to end up paying for these facilities that are ultimately benefiting someone who lives far away.
Amy Now, let’s talk a little bit about some of the water use issues. I think that when it comes to water, we are in the Great Lakes region, the biggest freshwater system in the world, so a very valuable place. And Milwaukee Riverkeeper, I think, asked and filed an open records request, how much water is this phase one of Microsoft’s data center going to use, the one that’s already under construction? And I guess they had a hard time getting that information. Tell me how that kind of unfolded.
Michael Yeah, so in February of this year, Milwaukee Riverkeeper first emailed the mayor of the city of Racine, sort of asking for how much water it was estimated that Microsoft’s data center was gonna be using. The mayor of Racine recommended that they reach out to the water utility director. And at that time, Riverkeeper filed an official public records request with the Racine Water Utility Director that was brought under Wisconsin’s public records law, which is meant to bring transparency and open government to the state, ultimately, so that citizens can assess the decisions that their public officials are making on their behalf. And that request sat completely unacknowledged and unresponded to for over a hundred days. And this is despite the fact that Riverkeeper had said in the request they were really just looking for the most recent simple estimates for how much water was going to be used. And then that could just be a single record that would be provided. So it’s not like they were asking the city to produce boxes and boxes of documents or any sort of complicated, technical, digital information. It was simply just asking for basically one piece of paper. And the city ignored that request for 100 days. And then after multiple follow ups from Milwaukee River keeper, they sort of acknowledged the request and said that they would work on it. The delay then continued. In June Riverkeeper asked Midwest Environmental Advocates to sort of represent them in resolving the request. So it was around that time I began regularly following up with the City of Racine to try to get a sense of whether they were working on the request, how quickly it was going to be processed. It was difficult to get information from them on where things were progressing. On a couple of occasions, they indicated they were actively working on it, that things would be moving forward. But nevertheless, the delay continued. So ultimately, what happened was just this week, Midwest Environmental Advocates on behalf of Milwaukee Riverkeeper filed a lawsuit seeking to compel the city to disclose the records that had been asked for over six months ago. Um, and then, you know, perhaps coincidentally, perhaps not, uh, two days after we filed the lawsuit, they released the record. Uh, that just happened yesterday. So, um, in the end, that is good news. It’s good news that they recognize they were subject to the public records law and that that record was released. Uh, That being said, it shouldn’t take six months, over six months and a lawsuit to compel a city to tell the public how much water one of these enormous facilities is going to be using.
Amy Are you surprised that this is how it played out after one, you know, question from Milwaukee Riverkeeper to had to come to legal action?
Michael I think I’m surprised in the sense that this could have been handled much quicker by the city of Racine. I will say that there have been other public records requests to cities around the state that are hosting these hyperscale data centers, and in other cases, cities have responded much more quickly than Racine did in this case. So, I think there certainly could have been and should have been a faster response here. Am I surprised by their reaction to the lawsuit? I suppose not. Nobody wants to get sued. And at the end of the day, it was probably easier just to quickly release the record than it was to proceed with litigation over it.
Amy I think it’s interesting that now, at least according to a newspaper report I just read, Microsoft is saying, well, you know, that amount of water that we’re going to be using, it’s not much. It’s the same amount that a golf course would use in the summer. And so they’re, you know, they’re being dismissive, like this is a trivial amount of water. Um, then why isn’t it something that’s easily easy to find on Microsoft’s website about this project? Why is it that Milwaukee Riverkeeper has to go to the water utility to understand how much Microsoft is going to be using? Maybe you don’t have the answer to that. But you might have a guess. I don’t know.
Michael It’s a good point. I mean, many of these data centers, these tech companies, they will state in a press release sort of how much water or how much energy their facility is going to be using. But I think the public has a reason to look on those claims, you know, with a bit of skepticism. At the end of the day, that information should be able to be verified by checking with the the water utility in this case that was going to be providing that water to sort of verify that the claims Microsoft had made public previously where we’re going to be backed up. And as far as the amount of water use itself, I think I want to push back on the idea that these facilities consume sort of a normal amount of water. It is true that in terms of their direct use, the amount of the water that we’re seeing reported for Microsoft and Mount Pleasant or for the data center being built in Beaver Dam is not unheard of in the state of Wisconsin. There are other large users of water that use similar amounts of water. However, that sort of doesn’t consider the full impact, which also has to look at the indirect water use that is caused by these facilities. And that’s because these data centers use enormous off the charts amounts of electricity. You know, as Clean Wisconsin released this week, just two data centers, the one in Port Washington and the one being developed by Microsoft and Mount Pleasant, those two facilities are going to use more electricity than the entire state, all the households in the state, I should say. So those are sort of unprecedented amounts of electricity. And electric generation is one of the largest water consumers in the State of Wisconsin. I think in many years, it’s as high as 70% of all water withdrawals in the state go to power generating facilities. Historically, coal plants have been huge users of water. And gas plants, like the ones that have recently been approved in Oak Creek or the town of Paris, those are also very large users of the water. So when you talk about a data center’s water use, you have to consider both the direct water impacts that are being used for cooling at that facility. We also have to considered the fact that they’re using unprecedented amounts of electricity and generating that electricity from coal or from natural gas also has huge water impacts. So just focusing on the facility itself isn’t the entire story.
Amy I’m really glad you pointed that out because I think that that is the story that we’re seeing though. Like I referenced that newspaper article, I believe it was in the Journal Sentinel, where it was kind of like, oh, the water’s not a big deal at the end. And there was no mention of, well, what about the enormous energy needs and the water needs of those generation plants? And so how important is it in your mind that… the public kind of get this more full picture of water use in total caused by these data centers?
Michael Yeah, it’s certainly important, you know. I think the public wants our elected officials, our state regulators to consider all of the impacts that these facilities are bringing to the state and move forward with a course of action that is best for the communities and the people of Wisconsin, not necessarily what’s best for Microsoft or other large tech companies. And to fully assess the impact, you have to look both at the direct impacts and the indirect impacts. And Wisconsin has a law that has demanded that of state agencies for over 50 years. We have the Wisconsin Environmental Policy Act, also known as WEPA. It’s sort of like the state version of the National Environmental Policy act, which is often referred to as NEPA. And what WEPA requires is state agencies have to describe and publish information on the environmental impacts of projects. And then there’s also a public engagement part of the law that allows the public to engage with the process, to provide comments. And the whole purpose of the statute is to make sure that state agencies, regulators are aware of all the impacts. Sort of the pros and cons of a project before they go forward with it. That was the idea behind WEPA when it was passed in the early 70s. And for many years, it did serve that purpose. And unfortunately to date, it has not been applied to a data center in Wisconsin. The Microsoft data center is being built on the Foxconn site. And that Foxconn development was explicitly exempted from WEPA by the legislature when they passed legislation sort of to facilitate that Foxconn development back when Scott Walker was governor. So to date, there has not been an environmental impact statement done on hyperscale data centers and how they impact the state. So. I think to date it’s fair to say that there hasn’t been a full consideration of the impact of these facilities on Wisconsin.
Amy Are you surprised that, you know, considering, I guess, how divisive things are right now, that it appears that at least our government officials are pretty united in being super excited about AI? And, you, know, you’ve seen the EPA, now one of their new pillars of work is unleashing the power of AI. You saw, you know, Governor Evers at the Microsoft data center celebrating the expansion. So this seems like something that leaders are really excited about.
Michael Yeah, I think it’s something we’ve seen at all levels of government and from elected officials on both sides of the aisle. I guess everyone loves the shiny new thing, the exciting new technology, and my argument isn’t that we shouldn’t have AI or that even that we shouldn’t build the data centers that support it in Wisconsin. My argument is that these sent these data centers should be built with transparency. They should be built with community input and they should be buil in a way that minimizes the negative environmental effects of them. And to date, I don’t think we have fully figured out how to do that as a state. And I think it’s something that the public is is yearning for, which is why you mentioned earlier that there’s been so much public response to this issue, whether it’s on social media or in the press.
Amy It feels like people are feeling used to some extent by tech companies and this push to come into Wisconsin. I have lived in a lot of places and people in Wisconsin really value Wisconsin. They really are proud of the state, they’re proud of the fishing and the hunting and the wildlife and the canoeing, all the things. Do you think that data centers are one of these rare, I guess, topics that really unite Wisconsinites, rural and urban, and folks on both sides of the political aisle?
Michael That’s a complicated question, and I can’t say I fully have a sense of where everyone is going to come down on the issue, ultimately. I do think that across the board, people care about their local community. They want to see it be economically vibrant, and they want to see jobs created. But at the same time, they don’t want to have tech companies that are from out of state come in, take advantage of the local resources, whether it’s land or water and not provide a fair end of the bargain. So to not live up to their end of a bargain, whether it’s providing jobs or economic development or tax base, yeah, absolutely. These facilities have local impacts. They often have hundreds of diesel generators located on the property. Those generators are for emergency purposes in name, but in practice, they often get run on a regular basis for maintenance and testing purposes. And those diesel generators have local air impacts. You can imagine what it would be like if there was dozens of diesel trucks just sitting in your neighborhood running for a couple hours at a time. There’s also impacts on local farmland, wetland, forests. Uh, there’s impacts on the surrounding community in terms of noise and light pollution. So I don’t think people want these facilities to be incentivized to come here by elected officials to be built here, use our resources, get tax breaks for doing so, and then the sort of negative impacts of them just get ignored or pushed under the rug or focused on the people who are unlucky enough to live in the immediate vicinity of them.
Amy I’m glad you mentioned the diesel generators, because that’s something that doesn’t get a lot of attention. And in fact, with the phase one of the Microsoft data center, it was only when Microsoft applied for air pollution permits, I believe through the DNR, that we really understood just how many diesel generators were going to be on that phase one of that site, and I think it was 130-something, certainly over 100 diesel generators on that site. Is that okay in your mind that the project’s already, you know, it’s approved, it’s getting built, and then you find out how many diesel generators are going to be there?
Michael No, I mean, I think ideally those sorts of impacts would be disclosed up front. You know, as I mentioned earlier, we have an environmental impact disclosure statute in the state under WEPA. I think it’s also the duty of local elected officials to sort of share those impacts with their community. You know everyone wants to release a press release that talks about jobs and tax benefits, but. There’s the other side of that coin as well. And I hope that elected officials will be upfront about those impacts. In terms of the diesel generators, these are… machines that emit harmful air pollution into the ambient air that can have impacts on people who have to live near them. In my mind, it would be much better to meet that backup power supply with battery storage. But to date, what we’ve seen is both Microsoft in Mount Pleasant and and the data center being built in Beaver Dam and the data center being built by Vantage in Port Washington, they’re all seeking to have large numbers of diesel generators on site.
Amy Yeah and you don’t see that as you mentioned in the in the city press releases. Oh more than 100 diesel generators on site or or however many I think 100 is just uh on the low side really of what we’re going to be finding out. In your mind what is the path forward because you mentioned Beaver Dam. There really hasn’t been a lot of real clear indication of of the environmental impacts on that site. There’s another large data center being proposed in Dane County. We’ve got these things kind of popping up. It feels like, you know, maybe once every couple months. What’s the path forward for folks in Wisconsin who really are struggling to figure out what’s going on?
Michael Yeah, I have a few thoughts on that. So, first, in terms of what we should be advocating for, first and foremost, there should be transparency to the public. The impacts of these facilities should be disclosed to the local community before they are voted on, before they’re approved. And those impacts should include water use, electricity use, they should include how many diesel generators are going to be on site. What sort of light or noise impacts there might be on the surrounding community. On top of that, we should be advocating for the energy that these facilities are gonna be consuming to be met with clean energy so that they don’t come into the state, dramatically increase the electrical demand within the state of Wisconsin, and then allow utilities to meet that demand with gas plants and delayed coal plant retirements. Instead, we should be meeting that energy with 100% clean energy. And then the third thing that is perhaps the most important is the cost of these facilities should not be passed on to rate payers. So when these huge electrical users come into the state, they spur a lot of infrastructure that is needed to support them. They require transmission lines, they require substations, they require electric generation plants to be built. And all the infrastructure is typically built and paid for by utilities who then recoup the costs from the public through monthly energy bills. And what we should ensure happens in Wisconsin is that the public isn’t left paying for all the infrastructure that was needed to support one large energy user, like a Microsoft or a Vantage. And in terms of what people can do about that, I think if a data center is being proposed near you, the best way to engage is going to be with your local officials. Local officials have a lot of power over whether a data center comes to your community. And if it does come, what’s the bargain looks like in terms of what the community benefits are and what the harms are going to be and how they can be mitigated. So engaging with your local officials, making sure that your voice is heard, making sure they know that at the facility is going to be built there, that they have to provide some local benefits to the community. And if a data center is not coming to your local neighborhood and you’re just wondering how you can engage with the issue broadly, I think we need to be contacting state legislators, contacting the governor’s office, expressing your concern over the issue. Ultimately, like you said earlier, it seems like elected officials sort of across the aisle, up and down the levels of government have been supportive of bringing these facilities to Wisconsin. And if that’s not something that’s you are a hundred percent supportive of, or you want to see these things built in a more responsible manner, then contacting your state legislators is an important way to start to make sure that they know about your concerns.
Amy What about the role of our energy utilities here? Because I think, you know, you and me may not know how much energy is going to be needed to support the Beaver Dam data center or the Dane County data center yet. But for sure, the energy utilities have a good idea, because they are the ones who, in the case of Alliant Energy in Dane county, are actively working to bring these data centers here. Should we expect more from our energy utilities in terms of transparency and even you know, go so far as to say, you know hey, Alliant Energy, hey, WeEnergies, what can you tell me about this project?
Michael Yeah, Amy, I’m really glad you brought that up. So the utilities, the energy utilities in Wisconsin are a very important part of the story. What has become clear is that many of these data centers are being actively recruited to come to Wisconsin by the utilities. And the reason they are the utilities are doing that is because they know that if they get a huge data center located in their neighborhood. It will drive up demand for electricity. And the utility will be able to serve that demand by building all sorts of transmission lines and substations and power generation plants. And then they can charge the public a uh they get a guaranteed rate of return on all of those infrastructure investments. And they can charge the public through their monthly energy bills to recoup the costs of that infrastructure.
Amy Right, plus the rate of return is basically a profit.
Michael It’s basically a profit. So the utilities have a very, very strong financial incentive to locate these large energy users in their area. And that’s why we’ve seen Alliant recruiting QTS to build a data center in Dane County. Alliant actually went out of their way to assemble all of the parcels, all the land parcels that are going to make up the Beaver Dam data center. So, Alliant Energy sort of like built to that site, marketed to data centers, and then sort of recruited the DAGUS LLC to develop the data center there, just north of Beaver Dam. So, the utilities are a really important part of this story. And, you know, there is a bargain between the utilities and the people of Wisconsin, that in exchange for that guaranteed profit they get for all the infrastructure they build, our Public Service Commission is supposed to oversee the utilities and make sure that what they’re doing is in the public interest. And it is absolutely the responsibility of the Public Service Commission to make sure that the impacts of these facilities are being disclosed to the public and to make sure that the utilities are acting in a manner that ultimately serves the public interest.
Amy I mean, are you seeing that from the Public Service Commission, that real want to make sure these energy utilities are acting in the public interest when it comes to data centers?
Michael I think there’s a strong argument that the Public Service Commission has been failing to uphold its responsibilities to require the utilities to act in the public interest. In recent months, we saw the public services commission approve lots of gas plants built in southeast Wisconsin. That was despite enormous public pushback against those projects, the demand for those projects was largely drummed up by the utilities themselves. So the utilities recruit the data center to come to their service area, then they say we have to build all this stuff to serve these data center’s needs and then they get a guaranteed rate of return on those investments and we’ve seen the Public Service Commission essentially being able to rubber stamp the utilities’ demands in those areas. Sorry, that wasn’t the most coherent answer.
Amy No, no, I mean, I think it is a pretty fair summary of what we have seen. So if somebody’s listening to this and they’re like, man, I’m feeling overwhelmed, right, because you got utilities, you’ve got lawmakers, you’ve got tech companies, these are very powerful entities. All with, you know, their hands in the cookie jar, you know excited and ready to go and pushing these three these things through. That if you want to say, hey, let’s press pause, let’s get some more information, it doesn’t seem like that request is really being heard. So what would you say to somebody who’s like, I just want to understand what’s happening?
Michael If folks want to engage with this issue, I think first and foremost, you should see what’s happening in your local community. You can ask your local elected officials if any data centers have been proposed nearby or if there’s any efforts to recruit them to come to the area. And if there is active work and recruiting or developing a data center. Then you should share your thoughts with your local elected officials, with your common council members. Make sure they know how you feel about it, because at the end of the day, the local officials actually have some of the most power over whether these facilities get built near you. And then in terms of other things you can do, you can call your statewide elected officials your state legislators and share your thought on data center issue more broadly. You can advocate for legislation to bring transparency and environmental stewardship to this developing area. And then if there’s a third thing you could do, you could join a organization like Clean Wisconsin that is working on the issue, sort of join with your community members who also care about it because there’s always strength and numbers on these things.
Amy Well, Michael, thank you so much for taking the time to talk with me. I know this is a complicated issue and one that seems like it’s becoming more and more urgent every day, so I appreciate it.
Michael Yeah, thank you for the time, Amy.
Amy And thank you for listening to the Defender. We have a lot of information for you on data centers in Wisconsin, at least as much as we can get our hands on. Just check the links in the chat or log on to cleanwisconsin.org/podcast. And if you have a comment on the show or something you want me to talk about, send me an email podcast@cleanwisconson.org. I’m Amy Barrilleaux. Talk to you later.
