Wisconsin PSC approves modified tariff for Webco very-large customers, orders new protections and reporting

The Public Service Commission approved, with modifications, Wisconsin Electric Power Company's proposed Very Large Customer (VLC) and bespoke resources tariffs aimed at serving data center-scale customers.

Chairperson Strand opened the April 24 meeting by calling the docket "a significant and consequential tariff docket unlike anything the commission has seen before," and framed the commission's task of balancing statutory standards with protections for nonparticipating customers. Commissioners debated tariff design elements for several hours before reaching consensus on a package of edits, reporting requirements and safeguards.

The commission adopted several material changes to the filing: it extended the minimum initial VLC term from 10 to 15 years; set the VLC eligibility threshold at 100 megawatts and made enrollment mandatory for customers meeting that threshold; and removed the proposal's capacity-only bespoke-resource track. The commissioners also required bespoke resources to have a term no less than the depreciable life of the resource (or the contract duration), with a 20-year floor for typical wind and solar assets. "Existing Wisconsin customers should not pay a single cent to subsidize the service of data centers or very large customers," Commissioner Nel said in urging strong protections for other ratepayers.

On transmission cost allocation'the commission's longest and most contested discussion'the commissioners accepted a load-ratio-share (LRS) billing method but directed a new minimum billing-demand tool to address timing and ramp-up mismatches. The tariff will require a minimum billing demand equal to 100% of a VLC's originally forecasted load or actual demand in the billing period, whichever is higher; where MISO/FERC jurisdiction limits immediate changes, the commission also authorized deferral accounting so timing mismatches can be reviewed in future rate proceedings. Commissioners said those steps are intended to limit front-loaded transmission cost shifts to nonparticipating customers while acknowledging some allocation questions remain under federal jurisdiction.

The commission also: approved the applicant's proposed administrative charge (fixed and demand components) with a requirement that the company provide detailed cost support in its next rate case; adopted credit-support measures (letters of credit, guarantees or cash) but removed tariff language that gave the utility sole discretion to waive requirements and raised the exemption credit-rating threshold to a level consistent with recent actions in other jurisdictions (S&P A- / Moody's A3); and approved termination and payment-and-cancellation safeguards to reduce stranded-cost risk for other customers.

Because the tariff and the issues it addresses are new and large in scale, the commission required additional reporting and transparency. The company must provide data showing how VLC capacity needs were met in future rate cases, work with staff and interested parties to develop future bespoke-resource filing requirements, file copies of any contracts entered into with VLC customers for commission visibility, and submit any contemporaneous FERC filings related to transmission cost allocation to the commission. Commissioners also directed staff and the applicant to develop a rider-style tariff as a placeholder tool that would allow the commission, in a future rate proceeding, to address any mismatches between incurred costs and recovered revenues discovered as this tariff is implemented.

Commissioners emphasized the limited and specified scope of the approvals: the commission's decisions govern the tariffs and cost-allocation within state jurisdiction and do not modify federal or local permitting authority. "This proceeding pertains only to Webco's VLC tariff proposal. We are not deciding whether a data center may operate in Wisconsin," Chairperson Strand said.

The commission moved and seconded approval of the tariffs as modified; the adopted package combines tariff edits, new reporting obligations, and guardrails intended to protect nonparticipating customers while allowing tailored arrangements to serve very large customers. The PSC said a final written order will follow after staff prepares the redlined tariff language and the parties have an opportunity to confirm that the order accurately captures the commission's decisions.

What happens next: staff will work with the applicant to implement the agreed redline changes and to file the rider-style tariff language so the commission has a mechanism to consider future adjustments in the next rate case if needed. The PSC also directed the company to include the required detail in future rate proceedings so the commission can reassess outcomes as actual VLC service begins.