Oracle, one of the tech giants behind a massive, $15 billion artificial intelligence data center project in Port Washington, is suing Wisconsin’s Public Service Commission, seeking to loosen financial restrictions that could cost the company millions of dollars each year.
The restrictions, part of a new electric rate structure approved by the commission in April, require that data center companies with credit ratings below A- post financial guarantees in the form of cash or lines of credit.
According to the commission, the requirement is meant to hold data centers responsible for their immense energy needs and prevent those costs from raising residential electric rates.
Oracle’s lawsuit, filed June 19 in Ozaukee County Circuit Court, comes nine days after the tech company, along with We Energies, petitioned the commission to loosen the requirement.
Oracle holds a BBB credit rating, below the A- threshold, stemming from debt taken on to finance new AI data centers. The rate structure set by the commission would require Oracle to post collateral to the tune of $100 million annually, according to the complaint.
In the June 10 petition, We Energies asked for the authority to request exemptions for companies with lower ratings that the utility deemed otherwise sufficiently creditworthy. Those requests would have appeared before commissioners for approval.
The commission axed that proposal out of concern over “granting overly-broad discretion” to We Energies, according to its written decision.
Like the petition, Oracle’s lawsuit argues the requirement imposes “substantial and unreasonable costs” on data center developers like Oracle.
The modifications “will create harmful and unintended consequences that will force significant investment outside of Wisconsin,” according to the complaint, filed by attorneys from Husch Blackwell, which has represented investor-owned utilities throughout the Public Service Commission’s deliberations.
Oracle argues the commission did not have substantial evidence to support its decision, relied on evidence not in the record, erroneously interpreted provisions of law and exercised discretion outside its authority.
Oracle’s attorneys did not immediately respond to requests for comment June 23.
In the June 10 petition, We Energies argued that Oracle’s credit rating, while not meeting the threshold, is reliable enough to not need the guarantees. And the utility said it uses other measures to gauge a company’s financial health, noting that other established tech companies like Intel, Tesla and Uber fall below the current credit rating threshold.
We Energies is the utility company tasked with powering the Port Washington data center run by Oracle, OpenAI and Vantage, as well as several data centers for Microsoft in Mount pleasant amounting to $7.3 billion in investment. New energy projects to power those data centers are projected to double the utility company’s energy-generating capacity by 2030.
The Public Service Commission has not yet responded to the June 10 petition or the June 19 lawsuit.
During deliberations over the data center rate in 2025, consumer advocates and clean energy groups made the credit rating requirements a rallying call, pointing to companies like Enron, which held an investment-grade credit rating just days before declaring bankruptcy in December 2001.
“We felt it was a good belt-and-suspender approach to have sufficient protection for customers in case things do go awry,” Citizens Utility Board of Wisconsin executive director Tom Content previously told the Milwaukee Journal Sentinel. “If something is problematic, you want to make sure a company can still pay its bills.”
In a June 22 press release, Clean Wisconsin called on PSC to reject the appeal to reopen the issue.
“The Public Service Commission did exactly what it’s supposed to do. It acted to protect We Energies’ other customers – families, small businesses, schools, manufacturers – and shield them from the risks associated with these enormous energy users,” Clean Wisconsin attorney Brett Korte said in the release.
Reporter Francesca Pica contributed to this story.
Contact Claudia Levens at clevens@usatodayco.com. Follow her on X at @levensc13.
This article originally appeared on Milwaukee Journal Sentinel: Oracle sues Wisconsin regulators over data center finance requirements
Reporting by Claudia Levens, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
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By Claudia Levens, Milwaukee Journal Sentinel | USA TODAY Network
