Wisconsin DNR to study data centers’ environmental costs
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Wisconsin regulators will conduct a full statewide review of the environmental impacts of data center development under a legal deal reached among environmental groups, a data center developer and the Wisconsin Department of Natural Resources.
The settlement reached Friday stems from a lawsuit filed in July by Midwest Environmental Advocates, or MEA, on behalf of Sierra Club against the DNR in Ozaukee County Circuit Court. The DNR, Sierra Club and Denver-based Vantage Data Centers signed off on the deal.
The groups sued over the agency's decision to issue permits for the $15 billion Lighthouse data center campus in Port Washington without conducting an environmental impact statement. The project is being developed by Vantage Data Centers and tech companies Oracle and OpenAI to expand capacity for artificial intelligence, or AI.
Under the deal, the DNR will conduct a strategic analysis of the anticipated build-out of AI data centers and associated infrastructure to power them under current plans and projections. The review will analyze the direct, indirect and cumulative effects of the buildout on the state's agriculture, air and water quality, climate, energy, economy, cultural resources and more.
MEA attorney Michael Greif said the DNR approached environmental groups about settling the lawsuit by either agreeing to an environmental impact statement for the Port Washington project or a broader statewide review of data centers.
"That second option was really exciting to Sierra Club because it would provide a holistic, comprehensive look at the environmental impacts and the financial impacts of these AI data centers on the state and on communities, and that's something that very few states have done across the country," Greif said.
In July, New York Gov. Kathy Hochul enacted the nation's first statewide moratorium on data centers while the state reviews their effects on the environment and energy use. The deal reached Friday among the DNR, groups and Vantage does not pause permitting of data center projects while the state completes its review.
"That's something that the next governor certainly could put in place, and I think that's something that would be the right approach for the state," Greif added.
Democratic candidate for governor David Crowley said in a statement that he would support halting new data center projects while the environmental analysis is taking place.
"David Crowley has been clear that he doesn't believe we should move forward with any new projects until firm guardrails are in place. As governor, he will work with the legislature to pause development until the review is complete and the new guardrails are in place," a Crowley campaign spokesperson said.
Both Crowley and Republican Tom Tiffany have called for new standards or guardrails before any new data centers move forward. A spokesperson for Tiffany's campaign said Tiffany has consistently said there should be no new data centers without five standards that include ending subsidies for data centers and barring non-disclosure agreements.
"Under my administration, the DNR will hold every proposed project to Wisconsin's environmental standards before a permit is issued, ensuring our water, land, and natural resources are protected. If a project doesn't meet these standards or the local community doesn't support it, it will not move forward," Tiffany said on his website.
Tiffany's spokesperson did not address the new statewide environmental analysis announced in the legal settlement.
Vantage will pay all costs tied to the strategic statewide analysis
A Vantage spokesperson said it supports a thoughtful, fact-based discussion about responsible data center development and has agreed to fund all costs tied to the strategic statewide analysis led by the DNR.
"The analysis will examine the environmental and economic considerations associated with data center development, providing policymakers and communities with additional information as the state considers the industry's continued growth," said Mark Freeman, Vantage's vice president of global marketing.
The DNR will retain sole control over the review, and the agency will have full authority to determine whether any future application or project complies with state laws. The DNR must complete its strategic analysis by Jan. 31, 2028, according to the deal.
A DNR spokesperson said late Monday that the statewide analysis will be an important tool to understand impacts and inform future policy decisions.
"We are also pleased that, under a negotiated settlement agreement with Sierra Club and Vantage, the DNR will be able to conduct the independent strategic analysis at no additional cost to Wisconsin taxpayers," the agency said.
The DNR must seek public comment and hold one or more public hearings on the analysis, and it will include summaries of the effects of data center development on energy bills.
Under the settlement, permits for the Lighthouse data center campus will remain valid, and further environmental review of those approvals is not required. Ward said the deal is an opportunity to ensure the state understands the impacts of projects, including future phases of the Port Washington campus. The first phase would use 1.3 gigawatts of energy, but it could require up to 3.5 gigawatts of electricity.
Sierra Club will withdraw its petition for a contested case hearing on the agency's decision, but the DNR will provide records requested by environmental groups. They had previously obtained emails that showed the agency initially informed Vantage officials that an EIS would be required, and company officials were "reviewing (and panicking) internally" about the requirement.
"The public still has a right to know why the department didn't do an EIS in the first place," Ward said.
A draft energy assessment released at the end of June by the Public Service Commission of Wisconsin found electricity demand could grow more than 40% by 2032 due to demand from hyperscale data centers.
The most recent Marquette Law School poll found 74% of voters surveyed in Wisconsin think the costs of data centers outweigh the benefits.
The data center campus in Port Washington includes four data centers and spans roughly 670 acres. The project could create more than 4,000 construction jobs and more than 1,000 permanent positions. Construction is anticipated to wrap up in 2028.