We Energies plans to spend $335M on Microsoft development in Mount Pleasant

We Energies plans to spend $335 million on a distribution project for Microsoft’s data center development on land originally intended for Foxconn in Mount Pleasant. 

According to a recent filing with the Wisconsin Public Service Commission, the utility company plans to start construction of “distribution facilities, including transformers, breakers, relays and other ancillary equipment” for the development. That work needs to begin no later than June, according to the filing.

 A construction update from Microsoft said We Energies will begin work on a substation on the property.

“The infrastructure we are building in Mount Pleasant will support the strong economic growth along the I-94 corridor, including Microsoft’s data center project,” said Brendan Conway, a spokesperson for We Energies.

Due to a law passed in 2017 as part of the Foxconn project, utility companies are exempt from needing PSC approval for projects in the development area. 

“What’s striking is the magnitude of what’s being proposed in terms of the amount of dollars that would be spent for something that normally the public service commission would have approval or authority over or at least a chance for oversight over,” said Tom Content, executive director of Wisconsin’s Citizens Utility Board.

Conway did not disclose how much Microsoft will be paying toward the project.

“The cost of this work will be recovered through distribution rates and Microsoft will pay its share of the costs,” Conway said.

Village of Mount Pleasant and Racine County officials approved a deal late last year allowing Microsoft to purchase more than 1,000 acres originally intended for Foxconn.  At least four data centers — which house thousands of computer servers — will be built on the land. Earlier last year, Microsoft broke ground on another data center in Mount Pleasant.

The U.S. Office of Energy Efficiency and Renewable Energy said data centers are one of the most “energy-intensive building types” and consume 10 to 50 times the amount of energy per floor space of a typical office building. Data centers currently account for approximately 2 percent of the nation’s total electricity use. Some of the largest data centers require more than 100 megawatts of power capacity, or enough to power around 80,000 U.S. households. 

Content said he believes it’s important that residential customers aren’t left holding the bill for the increased energy demand that come with the centers. 

“There’s a growing consensus in many states about the need to protect residential customers from these costs,” Content said.

A spokesperson for the PSC said they can’t comment on the project “due to the status of the application.” A spokesperson for Mount Pleasant said no village official was available to comment. 

Microsoft has more than 300 data centers in 34 countries. The company hasn’t publicly said how many people could be employed in Mount Pleasant, but similar data centers employ around 300 to 400 people per building. 

According to a Feb. 27 construction update, pile driving work at the site is expected to be finished by the end of March. Steel erection work has started and will continue for the next “several months.” 

The deal to bring Microsoft to Mount Pleasant came with no public financial incentives for the company and no new infrastructure from the village or Racine County. The deal will also help the village close a tax incremental district created for Foxconn earlier than anticipated.

Foxconn originally said it would invest $9 billion at the site and employ 13,000.

Editor’s note: The Citizens Utility Board of Wisconsin is an underwriter of WPR.