State Lawmakers Propose Bill To Incentivize Nuclear Energy In Wisconsin, With Potential Side Effects For Renewable Developers

State Senator Jesse James (R – Thorp) and State Representative Shae Sortwell (R – Two Rivers) have circulated a draft bill (LRB-4710/1) for co-sponsorship that is intended to bolster nuclear energy development in Wisconsin. The lawmakers cited data center development and increased electric demand in the state as the catalyst for their effort. If passed, the Bill would do the following:

Nuclear Energy Tax Credit
Create an annual credit for taxes imposed against nuclear energy facilities under certain enumerated Wisconsin statutes. Nuclear energy facilities located in Wisconsin would be eligible for the credit beginning in tax year 2030. The tax credit would equal the megawatt (MW) capacity rating of the nuclear energy facility, multiplied by a credit factor. The credit factor is $10,000 for the first ten years the facility claims the credit. The credit factor then decreases by $1,000 annually each year thereafter, and the credit cannot be claimed after 20 years. For example, a 1,000 MW nuclear energy facility would be eligible for $10 million in tax credits annually for ten years, with the annual credit decreasing by $1 million per year for the next ten years, at which point the facility is no longer eligible.

Energy Priorities Law
Modify the Energy Priorities Law (EPL), Wis. Stat. § 1.12 to add a state goal for new generation capacity to come from nuclear energy and making nuclear energy the highest priority under the law for generation additions. The current priority is that "all new installed capacity for electric generation in the state be based on renewable energy resources." Wis. Stat. § 1.12(3)(b). Except for energy efficiency, the EPL currently prioritizes "non-combustible renewable energy," like wind and solar, above all other types of energy to the extent it is cost-effective and technically feasible. Wis. Stat. § 1.12(4). The Public Service Commission of Wisconsin (Commission) must consider the EPL in its decision making. Wis. Stat. § 196.025(1)(ar).

Pre-Certification Cost Recovery for Utilities
Authorizes the Commission to permit electric public utilities to recover "qualifying precertification costs" of a nuclear energy facility through rates, including a reasonable return on such costs. "Qualifying precertification costs" means costs incurred by an electric public utility before filing Certificate of Authority (CA) or Certificate of Public Convenience and Necessity (CPCN) that are related to the development of nuclear energy, including costs related to feasibility studies, site evaluations, and preparation of regulatory filings.

Very Large Customer Rates
Authorize the Commission to approve electric utility tariffs (i.e., rates, terms and conditions) for serving a "very large customer" with nuclear power. A "very large customer" is defined as "a customer of an electric public utility that owns or operates a facility that has an electricity demand of at least 75 [MWs] per month."

The definition of "very large customer" is problematic because it uses a capacity value (MWs) to measure the customer's energy demand – energy is calculated using MW hours. Perhaps the bill authors meant the customer's peak demand. The bill should be amended to address this issue, if it passes. Regardless, the bill would allow electric utilities to create terms and conditions of service for individual very large customers, so long as the nuclear energy facility is within 75 miles of the relevant customer.

Key Takeaways
The Bill would primarily benefit Wisconsin utilities developing a nuclear energy facility in the state. Utilities could take advantage of all benefits of the Bill, including recovery of permitting costs and the creation of very large customer nuclear tariffs.

The Bill would also affect wind and solar energy development in Wisconsin by placing nuclear energy higher on the EPL. Wind and solar developers seeking a CPCN would need to show that nuclear energy is not a cost effective or technically feasible alternative to their projects. While this is likely achievable because of the high cost to develop nuclear energy, such an argument has not been tested before the Commission and adds a degree of risk to the permitting process.

Lastly, while the tax credit attempts to incentivize nuclear development, it is unclear whether $10,000 per MW annually (with the credit decreasing after 10 years) would achieve that goal. A Georgia utility recently incurred approximately $16 million per MW in capital costs to construct Units 3 and 4 of the Plant Vogtle Nuclear Facility (2,228 MW of capacity with a cost of approximately $35 billion). Assuming a Wisconsin nuclear facility is similar, the proposed tax credit would not substantially decrease the cost of construction.

The Bill is set for hearing in the Committee on Energy and Utilities on October 15, 2025, at 11:00 am. We will continue to monitor the Bill's developments.

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