Everybody wants the data center. Fewer people want the transmission bill. This is The Data Center Daily. Microsoft, regulators, and ratepayer advocates have suddenly landed in the same fight—and the water tab is getting harder to ignore. One tap on follow, and we'll be back in your ears before you know it. From Paul Kiefer at Wisconsin Watch:
Microsoft and Wisconsin ratepayer advocates are asking federal regulators to hit the brakes on a proposal to allocate the costs of transmission infrastructure built to serve data centers. Both argue that We Energies and the American Transmission Company’s (ATC) recent proposal to federal regulators fails to adequately protect Wisconsinites from picking up the construction bill, among other concerns.
Microsoft and Wisconsin ratepayer advocates are both asking FERC to slow ATC and We Energies down. Odd coalition: the hyperscaler and the people worried about their electric bills agree the paperwork needs work. ATC expects more than $500 million for the Mount Pleasant connection, and somebody has to wear that number. A 15-year minimum charge sounds solid until the load comes in lighter than forecast—or walks. We Energies says transmission already makes up about 10% of customer bills. Its proposed floor is meant to keep overbuilding costs off everyone else, but Microsoft and the advocates say the FERC structure still leaves too much exposure. And the PSC can’t simply make ATC bill Microsoft for the whole tab. FERC holds that lever, so Microsoft is now in the federal proceeding over its own grid bill. Funny how quickly a giant customer discovers consumer protection. From Maeve Allsup at Latitude Media:
It’s been two years since Pacific Gas and Electric first launched its flexible interconnection program on the distribution grid. The program, dubbed “Flex Connect,” is designed as a workaround to getting distribution-level projects connected faster if they rein in their demand during peak hours. Standardizing that offering, integrating it into PG&E’s distribution planning process, and then accelerating the pipeline has been a significant and time-consuming undertaking.
PG&E’s first flexible data-center connection lands this fall: a 5-megawatt Bay Area site on non-firm service. Small, yes—but it has an in-service date, which already puts it ahead of a lot of grander interconnection announcements. Now comes the part the paperwork loves to blur: when PG&E calls during a peak, does that 5-MW site actually back off? Flex Connect means faster power in exchange for curtailment. We’re about to find out whether the customer treats that as a contract or a suggestion. The rollout has been slower than the original forecast—PG&E wanted 10 sites online by the end of 2025 and finished with five. But seven projects are now operating, two have graduated to firm service after upgrades, and roughly 85 sites sit in the assessment pipeline. A real distribution-level program is taking shape. And after the ATC fight we just covered, here’s the useful counterexample: PG&E is offering conditional access up front instead of building first and arguing over a giant transmission bill later. Fine. But 85 interested sites are not 85 loads that have proven they’ll curtail. West Virginia Gazette-Mail, with Mike Tony:
The staff of the West Virginia Public Service Commission has made a case to the agency that it should consider dismissing the application it’s considering for regulatory certification of a deeply unpopular, $1 billion-plus regional interstate power transmission line project. The PSC staff has recommended a pause in the commission’s consideration of the application for NextEra Transmission MidAtlantic Inc.’s planned $1.16 billion MidAtlantic Resiliency Link project,
NextEra filed a $1.16 billion, 107.5-mile, 500-kV line in January. Now West Virginia PSC staff says pause it for 60 days, or dismiss it if the company won’t toll the deadline. Turns out landowners want to know their property is on the route before the clock runs out. The Oct. 26 evidentiary hearing is still on the calendar, but PSC staff is challenging the process underneath it. Newly affected landowners need due process, and staff needs time to investigate. PJM’s endorsement may support the need case, but it doesn’t waive the hearing record. And it lands right after the Microsoft-ATC fight we just covered. Same tension: developers want transmission moving now, while regulators and everybody holding the bill ask whether the load forecast—and the route—can survive contact with reality. A 500-kV line isn’t a site reservation. NextEra has a live choice before the PSC: agree to tolling, or risk having the certification application dismissed. Here's Latitude Media:
The debate over data centers’ water use tends to focus on how much is needed to cool servers on-site. But that fails to capture the largest and least visible part of their overall use: the water used at the power plants fueling data centers’ rising energy needs. Only one hyperscaler, Meta, reports its indirect water consumption embedded in purchased electricity.
Ceres puts the electricity-side water bill at 3.4 trillion gallons across seven states in 2024—about 12 times the combined use of Los Angeles, Phoenix, and Washington, D.C. That’s the water meter the on-site cooling debate keeps missing. And two-thirds of the plants Ceres examined sit in medium-high to extremely high water-stress areas. Arizona is already in drought; Illinois is leaning on water-intensive nuclear in the Mississippi-Missouri basin. Great place to hide a consumption number—in somebody else’s power plant. Meta is the only major hyperscaler publicly reporting this indirect figure, and it was more than 20 times its direct data-center water use in 2024. Amazon says it tracks the number but is still working on a framework; Google and Microsoft wouldn’t say whether they track it. Grid costs aren’t the only hidden footprint that deserves scrutiny. Ceres projects four to eight trillion gallons by 2030. So when somebody sells a low-water campus, ask what generation serves it, where that plant pulls water, and whose watershed gets volunteered for the AI boom. If you follow the data center world, you may also enjoy AI Daily Briefing: top AI news for engineers, founders, and investors every weekday, with real capabilities versus demo hype explained fast. Find it wherever you listen to podcasts.
Looking ahead, PG&E plans to bring its first flexible data center site online this fall: a 5-MW facility in the Bay Area. And the West Virginia PSC evidentiary hearing on NextEra’s MARL project is scheduled to start October 26, unless the proceeding is tolled or dismissed.
Links to every story are in the show notes, so take a look at the ones you’d like to explore further. That’s The Data Center Daily for today. This is a Lantern Podcast.