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Wisconsin regulators voted Thursday to send the American Transmission Company (ATC) back to the drawing board as the utility attempts to build the grid infrastructure needed to plug in the Port Washington data center.
Public Service Commission (PSC) Chair Summer Strand called the move a “reasonable reset” after ATC repeatedly adjusted the project’s design, which commission staff and ratepayer advocates argued left both regulators and the public with a muddy picture of a grid expansion expected to cost well over $1 billion.
ATC and its partners, however, warned the decision — likely the first of its kind for the century-old commission — could set a dangerous precedent that drives away investment in Wisconsin’s energy sector.
Data center connection at risk
ATC, which owns and operates transmission lines in the eastern half of Wisconsin, is on the hook to connect the soon-to-open Port Washington data center to the electrical grid.
The company approached the PSC last September for permission to break ground on the project as early as this past May. Its initial application outlined a more than $1.3 billion infrastructure package, including a high-voltage transmission line and five new substations spread across Fond du Lac, Ozaukee, Sheboygan and Washington counties, needed to “reliably serve” the new data center by December 2027. After two months of back-and-forth over the “completeness” of ATC’s application, the commission took up the proposal in December 2025.
ATC has since been vocal about the urgency of the infrastructure buildout needed to support the data center boom. The company is part of a coalition of utilities asking the Federal Energy Regulatory Commission (FERC) to speed up regional transmission projects needed to serve data centers by suspending competitive bidding, arguing that “bureaucratic red tape” presents a national security risk as the U.S. competes with China for “dominance” in the artificial intelligence race.
Meanwhile, the utility has repeatedly adjusted its plans since December, redesigning proposed routes and adding a set of temporary bypass lines needed to avoid outages during construction. The PSC is responsible for reviewing those changes and giving other parties, namely ratepayer advocates and affected landowners, an opportunity to weigh in.
Some commission staff sounded the alarm as the pile of revisions — and questions — grew.
“I don’t recall any other comparable cases in my experience with as many application material document revisions and ongoing design changes throughout the process,” PSC Environmental Affairs Coordinator Adam Ingwell wrote in testimony filed last month. “The sheer volume of documents and revisions, without adequate explanation, likely makes it more challenging than typical for a member of the public to find specific information about the project.”
Those concerns reached Administrative Law Judge Michael Newmark, who criticized ATC for creating an “unreasonable burden” on commission staff and the public by scattering “a plethora of changes, modifications and updates” across six months of filings.
ATC, on the other hand, cast the revisions as “routine.”
“Every application develops during review,” the company’s attorneys wrote on Wednesday. “Changes far larger and later than ATC’s have never cast doubt” on whether an application should move forward, they added, citing a Barron County solar farm the PSC approved last March despite an “eleventh-hour” overhaul that included “relocating an entire substation.”
“There is simply no principled basis on which to treat ATC’s lesser and earlier changes more harshly,” the attorneys wrote.
Ratepayer advocates weigh in
Ratepayer advocates generally avoid wading into fights over transmission line routes and substation siting, which Wisconsin Citizens Utility Board (CUB) Regulatory Affairs Director Corey Singletary described as a “zero-sum proposition” in which a victory for one group of landowners means shifting construction impacts onto another group of landowners.
But CUB raised concerns that ATC’s revisions make it difficult to forecast the project’s cost.
The route changes and new bypasses make the price tag “a moving target,” said CUB Executive Director Tom Content, as does the possibility that ATC still attempts to complete the project by December 2027. “Would they be paying double overtime or triple overtime to build it that quickly?”
The Wisconsin Utility Association itself weighed in on Wednesday to warn the PSC that any additional delays in the project will “lead to increased costs for customers.”
Transmission utilities generally pass along the costs of new infrastructure to ratepayers of all kinds via their electrical bills; We Energies, for instance, estimates that transmission-related costs account for about 10% of customers’ bills.
The PSC can’t require ATC to assign project costs to the companies developing the Port Washington data center. Only FERC, the five-person federal regulator that oversees interstate transmission, could overhaul billing rules to fully shield other customers from the costs of new lines and substations needed to serve data centers.
The commission offered an ad hoc solution this spring. The PSC’s May order creating a new billing structure for We Energies’ data center customers requires data center operators to pay a minimum transmission charge based on their projected electricity use. Wisconsin PSC Commissioner Kristi Nieto called the arrangement a “temporary stopgap measure” to protect other customers from the costs of overbuilt infrastructure if data centers use less electricity than anticipated.
ATC and We Energies have since asked the PSC and FERC to approve a minimum transmission charge agreement with Microsoft, the operator of the vast new data center in Mount Pleasant. “This is a customer protection mechanism that follows the ‘cost causer, cost payer’ methodology,” an ATC spokesperson wrote in an email to Wisconsin Watch.
The utilities have not yet asked the commission to approve similar agreements with the companies developing the Port Washington facility: cloud computing giant Oracle, artificial intelligence firm OpenAI and data center developer Vantage.
In testimony filed last month, Singletary urged the commission to enforce “cost containment” measures for ATC’s project, including requiring the utility to cap its annual revenues from the new transmission lines. He also suggested that the commission push ATC to disclose any bids it receives for “work to be performed and equipment to be procured as part of this project,” which he argued would help keep an eye on the company’s efforts to rein in costs.
‘Least-bad option’
All three commissioners aired matching frustrations during a Thursday afternoon hearing on ATC’s infrastructure plans before concurring on what Commissioner Marcus Hawkins called the “least-bad option” — requiring ATC to resubmit its application and restarting the case’s 180-day clock.
“There needs to be flexibility in the process,” said Nieto, “but there also has to be some point at which the changes become significant enough that we need to evaluate whether we are still reviewing the same project that was originally proposed.”
“This PSC is not opposed or hostile to data centers, construction, generation, (or) transmission,” Strand said, calling the decision “an unfortunate outcome.” Nevertheless, she added, “this application represents a cautionary tale of when unrealistic and unreasonable speed-to-power expectations collide with a deliberative regulatory process.”
ATC has not indicated when it will resubmit its application as of Thursday afternoon, nor whether the December 2027 deadline is still within reach. “ATC is disappointed with today’s Commission’s decision and is considering its options,” a company spokesperson wrote after the hearing.
But the company’s final filing before the hearing signaled the possibility of a legal fight. “To date, the Commission has processed the application consistent with the law,” the company’s attorneys wrote. “At this stage,” restarting the process “would be the one action to depart from that.”
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Wisconsin regulators send ATC back to the drawing board on data center connection project is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.
