Why the true cost of new gas plants is much higher than the sticker price
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- PJM Interconnection's reopened 220-GW queue is now nearly half gas, almost double what utility plans called for as of last year, and MISO's Expedited Resource Addition Study fast-track is roughly three-quarters gas
- Georgia Power, Duke Energy, and Dominion Energy have all announced major capital investments in new gas generation specifically to serve data center load growth
- Current Energy Group and GridLab found that adding firm pipeline transportation, gas storage, and processing contracts inflates the real cost of a gas plant by roughly 30% over its upfront construction price
- WE Energies is planning $1.5 billion in new gas generation and $668 million in associated pipeline and LNG storage — a 30% add-on that was not included in the CPCN proceedings for the generation, coinciding with a new Microsoft data center announcement in Wisconsin
- Since the initial analysis, WE Energies' costs have grown to roughly $6 billion in generation and $1.3 billion in LNG storage, illustrating the upward pressure on customer bills the report warns about
- The report highlights a structural data gap: gas generation is approved in a Certificate of Public Convenience and Necessity proceeding while the storage and pipeline needed to fuel it is reviewed separately, often after the plant is already approved
Why it matters: If regulators keep approving gas plants on sticker prices that exclude the 30% pipeline-and-storage markup, Wisconsin ratepayers alone face hundreds of millions in hidden surcharges tied to a Microsoft data center they may not directly benefit from — WE Energies' tab has already ballooned from $2.2B to $7.3B since the initial filing.
