We Energies is asking state regulators to loosen some artificial intelligence data center companies’ financial guarantees under a recently approved electric rate.
The Public Service Commission in April approved the utility’s creation of a separate electric power rate for hyperscale data centers, with modifications to strengthen customer protections and accountability measures for tech companies. That included a requirement that data center companies with credit ratings below A- post financial guarantees in the form of cash or lines of credit.
We Energies also sought authority to request exemptions for companies with lower ratings that the utility deemed otherwise sufficiently creditworthy. These requests would come before commissioners for approval and could later be modified if a company’s financial status changes.
The commission axed that proposal out of concern over “granting overly-broad discretion” to We Energies to require financial backing, according to its written decision order.
But the utility filed a petition June 10 saying the commission’s modifications place unreasonable costs on businesses like Oracle, the $600 billion cloud computing company that is developing the massive data center campus in Port Washington with OpenAI and Vantage.
Oracle holds a credit rating below the A- threshold but is reliable enough to not need the guarantees, We Energies argued. In addition to credit ratings, the utility uses other measures to gauge a company’s financial health.
“We understand concerns about very large customers, which is why this rate is designed so data centers pay the full cost of the infrastructure needed to serve them,” We Energies said in a statement June 11. “We believe revisiting the financial support requirement issue will help ensure the policy meets the goal we all agree on: protecting customers while supporting jobs and economic growth in Wisconsin.”
The other hyperscale data center project in southeast Wisconsin, located in Mount Pleasant, is owned by Microsoft. The tech giant holds the highest possible credit rating and does not have to post collateral under the current framework.
We Energies says new rules could hamper future projects
We Energies further argued the requirements could make it harder to attract data centers to Wisconsin in the future, noting that established tech companies like Intel, Tesla and Uber fall below the current credit rating threshold.
The utility asked commissioners to restore its exemption option and reduce financial support requirements for “highly creditworthy” companies below the A- threshold. It also wants the commission to approve a waiver that significantly reduces the collateral Oracle would have to post.
We Energies argued that the commission made the modifications based on evidence not formally included in the record.
During deliberations over the data center rate in 2025, consumer advocates including the Citizens Utility Board of Wisconsin called on commissioners to strengthen financial guarantees required of tech companies. They pointed 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,” CUB executive director Tom Content said. “If something is problematic, you want to make sure a company can still pay its bills.”
CUB is still reviewing We Energies’ petition, Content said, but “we really appreciated the commission’s action to layer more customer protections.”
“We think the commission’s decision was based on evidence,” he said, adding that the petition could result in weakened consumer protections.
Oracle says rules could cost $100 million a year
Oracle joined We Energies in requesting the changes. The company said filings that under current requirements, it has to post more than $7 billion in collateral at a cost of $100 million per year.
“The financial security structure the Commission approved implicitly assumes that investment-grade [data center companies] could default at any minute, and that any infrastructure built to serve those customers would have zero residual value in the unlikely event of such a default,” said Julia Robin, Oracle vice president of infrastructure capacity and sourcing. “In my view, neither assumption is realistic.”
The filing comes as Oracle’s stock tumbled June 10, with investors growing concerned about the debt it’s taking on to build out AI infrastructure across the country. The company exceeded spending targets in 2026 and expects to raise billions more in debt in 2027.
We Energies stressed in the petition that it’s not challenging other Public Service Commission modifications to the new energy rate, including guarantees that data center companies pay the full cost of new energy infrastructure built to serve them.
The utility asked commissioners to grant a rehearing on the financial support requirements in the next few weeks.
This article was updated with additional information.
Francesca Pica can be reached at fpica@usatodayco.com.
This article originally appeared on Milwaukee Journal Sentinel: We Energies seeks to loosen some financial guarantees for data centers
Reporting by Francesca Pica, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
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By Francesca Pica, Milwaukee Journal Sentinel | USA TODAY Network
