We Energies Tries to Sidestep PSC Order in Microsoft Contract Dispute

A recent contract between Microsoft and We Energies includes a provision that conflicts with an order from Wisconsin's Public Service Commission (PSC). The agreement, signed last month, specifies that power plants serving data centers must be located in eastern Wisconsin or Michigan's Upper Peninsula. However, the PSC voted in May to remove these geographic constraints.

We Energies has stated that it will follow the commission's order and work with them to resolve the discrepancy. The company argued during the PSC deliberations that power plants should be located as close as possible to data centers to minimize grid failures. However, ratepayer advocates and clean energy groups criticized this plan, saying it would limit access to cheaper wind energy.

The commission ultimately sided with these critics, striking the location constraints from the approved rate structure for large data center customers. We Energies then sent an outdated version of the contract to Microsoft, which included the conflicting provision. The company has signed up to purchase electricity from a planned natural gas plant in Kenosha County.