Oneida County advances moratorium on data centers

Though there are no proposals currently on the table to build a data center in Oneida County, local officials are moving proactively to get ahead of the contentious issue, voting last week to begin the process of enacting a one-year moratorium on such developments.

On April 29, the county’s zoning committee directed staff to prepare an ordinance amendment establishing a temporary ban. The full county board would have to approve the amendment following a public hearing.

The action comes as Wisconsin regulators and local governments across the state grapple with the explosive growth of the centers, which are large facilities that house computer servers and networking equipment used to process, store, and distribute vast amounts of digital data. Modern data centers — particularly those supporting artificial intelligence — require huge amounts of electricity to power servers and cooling systems, along with significant water resources in some iterations.

While the county is pursuing a pause — a moratorium is not a given — so supervisors can study potential regulations, the state’s Public Service Commission (PSC) recently took steps to ensure that those facilities do not shift their costs to existing ratepayers. On April 24, the PSC revamped We Energies’ Very Large Customer (VLC) tariff application, primarily to prevent cost-shifting to existing customers.

At the county level, officials made clear they were not reacting to a specific proposal, but rather to accelerating trends.

“Part of my job responsibility is, when we see something coming at other counties, we’re supposed to try to address it within our county,” zoning director Karl Jennrich told the committee. “So there’s a lot of email traffic on the Wisconsin County Code Administrator’s website, and you are seeing some of the counties now in the south [part of the state] being hit by the data centers and they’re struggling because there’s a big billion dollar investment in a community and some communities are ready for it, meaning that they have some kind of regulations in place.”

But others just get steamrolled by it, Jennrich said.

“They don’t know what to do once they get some of these applications,” he said. “So the only thing I’ve seen is that there are counties starting to look at regulating. So you as a committee have to figure out, do you want to regulate data centers?”

The time required to answer that question — combined with the scale of potential impacts — prompted committee members to consider a pause.

“I think it would be wise to put a moratorium on for a year so we can study it and come up with where we would be likely to place [them],” committee chairman Scott Holewinski said.  

Supervisor Bob Almekinder formally moved to establish the moratorium, with discussion quickly turning to its scope and legality.

“A moratorium is legal as long as there’s a sunset,” Jennrich said. “So it’s basically six months or a year to give the county time to figure out what do you want to do with them.”  

Supervisor Billy Fried asked if a year was the maximum the county could impose, and Jennrich said not necessarily.

“If there’s a record of the county working diligently or having monthly meetings and working expeditiously to try to get some credible regulations in place, I think it can withstand a challenge,” he said. 

The committee approved the preparation of an ordinance amendment that would go to public hearing.

Regulatory gap

One of the central issues raised during the meeting was the absence of any existing framework for data centers within the county’s zoning code or comprehensive plan.

“We do not have a definition of data centers and we do not have a zoning district that they’re placed in,” Jennrich said.  

Under current ordinance language, Jennrich said, such uses would fall under “unclassified or unspecified uses,” which are generally prohibited unless specifically approved.

“So the ordinance …. allows unclassified or unspecified uses,” he said. “Unclassified or unspecified uses are presumed to be prohibited, unless authorized by the committee of review and recommendation of the zoning administrator, providing that such uses are compatible with the permitted uses, administrative uses, or conditional uses allowed in that district.”

Right now, Jennrich said, because the centers are an unspecified use without a zoning district, the only way the county could regulate them is to put them in the ordinance in whichever zoning districts the county determines would be appropriate.

“The suggestion was M&I (manufacturing and industrial) but you have to take more of a detailed look on what they are, what effects they may have, how much parking or how many people, that type of stuff that they may impact the local community and then figure out what you believe the appropriate zoning district would be to place them into,” he said.

Some counties are going with moratoriums because they want to study the issue in-depth, Jennrich said, adding that some counties have their own standalone regulations.

“They’re saying they are allowed in certain zoning districts, but they may actually add additional regulations or additional requirements,” he said. 

Jennrich said he didn’t know much about data centers but had spoken with Larry Konopacki, who has performed contract legal work with the county on DNR and shoreland zoning issues. Jennrich said Konopacki was also working with Beaver Dam, where a large data center is ongoing. 

“So he’s intimately involved in helping create TIDs or TIF districts and he understands the impacts that they may or may not have on water usage and power,” he said. “Those are the two big ones I’ve heard, water and power. But Larry’s saying that water is not becoming as big an issue as it used to be because most of these now have contained systems that are recycling water to keep everything cool.”

Jennrich said the county also did not have a lot of places with municipal sewer and water, which he said is where the data centers were going.

Supervisors also said the data centers were not addressed in the county’s comprehensive plan.

PSC steps in

At the state level, regulators took action on April 24 to address one of the biggest concerns surrounding data centers: who pays the freight.

In a major decision, the PSC overhauled We Energies’ proposed tariff application for very large customers (VLC), specifically targeting data center development. Commission members acknowledged that the goal was to prevent existing customers from subsidizing the costs of the facilities.

In announcing the overhaul, the PSC explained that utility tariffs set the rates, terms, and conditions of the service that utilities provide to customers within their service territory. 

“When a utility wants to create a new tariff or make changes to an existing tariff, it must receive PSC approval to do so because the PSC regulates electric, gas, and water utilities in Wisconsin,” the PSC stated. “The commission does not regulate the permitting, construction, or operations of data center facilities.”

In March 2025, the PSC continued, We Energies submitted an application proposing the new tariffs in response to large data center customers entering the utility’s service territory. 

“The PSC conducted a thorough, year-long review of the tariff application, which included detailed scrutiny and analysis by PSC staff and intervening parties, and a robust public engagement process,” the PSC stated. “Throughout the proceeding, members of the public and participating organizations raised concerns about aspects of the utility’s application and how it could impact existing customers.”

Those concerns led to major modifications to improve the tariffs, the PSC stated, with one PSC member saying a first principle would be ‘do no harm.’

“We need to do everything within our jurisdiction to make sure data center customers will pay their own way, fully and transparently, and other customers will be held harmless,” commissioner Kristy Nieto said at the April 24 meeting.

Commissioner Marcus Hawkins agreed.

“I’d also like to acknowledge the attention the issue of transmission costs has gotten from intervenors and the public,” Hawkins said. “Without the large and loud engagement on this topic, I doubt we would have seen the movement we have from the applicant and ATC to evaluate creative solutions to this issue.”

PSC chairwoman Summer Strand emphasized openness and the need for regulatory control.

“Today I will seek several modifications to reach two overarching, crucial goals: to increase transparency and visibility into the utility and its data center customers, and to ensure the tariffs we approve today include the necessary protections to safeguard existing customers from harm, consistent with our statutory obligations,” Strand said.

Specifically, the commission extended the VLC tariff minimum initial term length to 15 years, a critical move designed to prevent cost-shifting to existing customers. It also lowered the energy demand threshold for tariff eligibility from 500 MW to 100 MW. That expands tariff applicability to smaller data centers, the PSC stated, which further shields existing customers from data center-related costs.

The PSC also required tariff revisions to address the risk of transmission cost shifting from data center customers to existing customers, and it removed a capacity-only option that would have allowed data centers to only pay for 75 percent of the costs of generating facilities. The removal of this capacity-only option and the approval of the Full-Benefits resource model protects existing customers by requiring the VLCs to pay 100 percent of their costs, the PSC stated.

In addition, the commission ordered additional reporting requirements to provide visibility into how the tariffs work in practice and created a mechanism for the PSC to make future adjustments if needed.

Finally, the commission ordered additional reporting requirements it says will bring greater transparency to agreements between the utility and its VLCs.

Statewide surge in development

The state and local responses comes amid a dramatic expansion of data center development across Wisconsin. The state already has dozens of facilities, with major new projects concentrated in the southeastern region.

Key recent developments include a large Microsoft complex in Mount Pleasant; a 672-acre, 1.3-gigawatt campus in Port Washington involving Vantage Data Centers and Oracle, and a Meta facility in Beaver Dam. In total, about 40 to 50 facilities are either in the planning stages or under construction or already operating.

But there are concerns in addition to the impact on ratepayers. Perhaps the most striking is energy consumption.

A recent analysis by Clean Wisconsin found that just two proposed projects — the Microsoft center in Mt. Pleasant and the Vantage facility in Port Washington — would require a combined 3.9 gigawatts of power, which Clean Wisconsin says is enough to power approximately 4.3 million homes, far exceeding the approximately 2.8 million housing units in the state.  

“To put this in perspective, that is more than three times the power production capacity of Wisconsin’s Point Beach nuclear reactor,” Clean Wisconsin’s science program director Paul Mathewson, who conducted the analysis, said. “And because only two of the data center projects have disclosed their power needs, we know this is really just a fraction of what the energy use would be if all those data centers are ultimately built.”

Water use is another major issue, though one with less publicly available data. Sara Walling of Clean Wisconsin said gas-fired power plants use 2,803 gallons of water per megawatt-hour of energy produced, and the centers’ energy demands will put even more strain on the state’s water resources. Walling said it raised questions about cumulative impacts on local water systems, particularly during peak demand periods.

“Add to that a lack of transparency about energy use, and it’s impossible to know what the impact on Wisconsin’s water resources will be,” Walling said. “Communities need to know what the on-site demand will be on the hottest, driest days of the year when our water systems are most stressed. And we need to understand how much water will be needed off site to meet a data center’s enormous energy demands.”

Clean Wisconsin asserts that Wisconsin’s energy utilities are often involved in the early planning of these projects, sometimes playing an active role in bringing them to the state. For example,  the group asserts, citing newspaper reports, in early negotiations about the Port Washington project, We Energies enticed the developer to build a much bigger data center campus than was initially planned, which more than tripled the project’s energy needs. Meanwhile Clean Wisconsin says Alliant Energy lured data center developer QTS to Dane County after working with the company on a similar project in Iowa, a project that would take up more than 600 acres in the small farming community of Vienna.

“If data centers come to Wisconsin, they must benefit — not harm — our communities,” Clean Wisconsin climate, energy and air director Chelsea Chandler said. “But right now, we have far more questions than answers about their impacts. How much energy and water will a project use? How will those demands be met? Will there be backup diesel generators on site and how often will they be fired up for testing? Our communities don’t have the transparency they need and deserve.”

Back in Oneida County, those same uncertainties are driving the push for the moratorium.

Supervisors and staff last week repeatedly emphasized the need for information before making long-term decisions.

“We just need information to make the decision instead of hearing all the negative stuff,” Holewinski said.  

If approved, the one-year pause would give the county time to study the issue, develop definitions, and establish zoning frameworks.

Richard Moore is the author of “Dark State” and may be reached at richardd3d.substack.com.