Wisconsin Assembly Approves Data Center Bill Despite Union Opposition

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The Wisconsin State Assembly passed a bill to regulate the state’s growing data center industry, despite opposition from Democratic lawmakers and several construction unions. The bill mandates data centers to use closed-loop cooling systems, report annual water usage, and cover water reclamation costs. It also directs the Public Service Commission to ensure costs for building or expanding energy grids for data centers are not transferred to other utility customers and that renewable energy facilities servicing data centers are located on the same site.

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Wisconsin State Assembly Passes Bill Regulating Data Center Industry

On January 20, the Wisconsin State Assembly gave the green light to Assembly Bill 840, designed to regulate the mushrooming data center industry in the state. The legislation aims to tackle environmental issues and manage utility costs related to the sector, despite facing resistance from several construction unions and Democratic lawmakers.

The bill obtained approval with a 53-44 vote, largely from Republicans. Rep. Lindee Brill, R-Sheboygan Falls, however, sided with Democrats in voting against, while two Democrats—Steve Doyle, D-Onalaska, and Jodi Emerson, D-Eau Claire—cast their votes in favor of the bill.

Bill Provisions: Environmental Safeguards and Utility Costs

Assembly Bill 840 stipulates that data centers must employ closed-loop cooling systems that recycle a fixed amount of water to extract heat from equipment. Moreover, operators are required to submit an annual report on water usage to the Department of Natural Resources (DNR), as well as post a bond to cover water reclamation expenses. The bill also mandates that if construction is not completed, the site should be revived back to its pre-construction state.

Labor Union Criticism and Regulatory Pushback

The legislation also mandates the Public Service Commission to ensure that the expenses of developing or extending the energy grid to cater to data centers do not burden other utility users. Renewable energy facilities primarily serving data centers must also be located on the same premises.

“It provides no guarantees that the jobs created will be safe and well-compensated, much less union. Wisconsin badly needs those good-paying, safe, union-protected jobs,” voiced Rep. Darrin Madison, D-Milwaukee, expressing his concerns about the lack of provisions for a prevailing wage and oversight of energy consumption at data centers.

Unions Appeal Against the Bill

A significant number of unions representing construction electricians, ironworkers, utility workers, plumbers, carpenters, sheet metal workers, and laborers across Wisconsin have expressed their dissent against the bill. Their formal objections highlight the lack of prevailing wage protections and the potential environmental fallout of data center operations.

As Wisconsin witnesses an upswing in renewable energy projects—partly funded through federal tax credits under the Inflation Reduction Act—Democratic lawmakers had earlier proposed an alternative bill. Their proposed legislation included prevailing wage requirements for laborers on data center sites, mandatory reporting of energy and water usage to state authorities, and green building certification.

Supporters of the bill maintain that it includes vital environmental safeguards and protects utility customers from bearing the costs of large-scale energy projects for data centers.

The legislation reflects the increasing tensions between economic growth, union labor protections, and sustainable energy regulation as the state’s tech industry is on a rapid growth trajectory.

Further details on this story were originally reported by Ethan Duran in The Daily Reporter.

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