Oracle Files Lawsuit in Wisconsin Over Data Center Electricity Rates
Oracle America Cloud Services has filed a lawsuit in Ozaukee County Circuit Court, challenging the Public Service Commission of Wisconsin's approval of a special electric rate for very large customers, including data centers. The company argues that the new financial security requirements associated with these tariffs will impose significant costs, potentially exceeding $100 million annually, and may deter future data center investments in Wisconsin. Oracle is seeking judicial review to nullify the PSC's modifications and reinstate Wisconsin Electric's original rate proposal.
Oracle America Cloud Services, a subsidiary of Oracle Corp., has initiated legal proceedings in Ozaukee County Circuit Court, seeking a judicial review of a decision by the Public Service Commission of Wisconsin (PSC). The lawsuit challenges the PSC's approval of a special electric rate, known as the "very large customer tariff and bespoke resource tariff," which applies to major power consumers such as data centers. Oracle, a tenant in Vantage's Lighthouse Campus data center under construction in Port Washington, contends that the financial security and credit requirements stipulated in the approved tariffs are unduly burdensome.
According to Oracle, the PSC's modifications to the rate structure, particularly concerning credit rating requirements for customers with ratings below A-, will impose significant annual costs on the company, potentially exceeding $100 million. Oracle argues these costs are disproportionate to the risks they are intended to mitigate and were not part of Wisconsin Electric's original rate plan, which the company relied upon when investing in the $15 billion Port Washington data center project. The lawsuit asserts that these changes could deter future investment in Wisconsin's data center sector.
Wisconsin Electric Power Co., which provides power to the data center, initially sought the new rate structure to ensure large energy users covered their infrastructure costs. However, in a prior petition filed with the PSC alongside Vantage Data Centers and Cloverleaf Infrastructure, Wisconsin Electric also acknowledged the need for discretion in applying financial support requirements, citing situations where highly creditworthy companies might not meet certain tangible net worth or liquidity tests but still present a low default risk.
Oracle's lawsuit requests that the PSC's approved rate structure be set aside and the matter remanded with instructions to approve Wisconsin Electric's original proposal. The company claims the PSC lacked substantial evidence for its changes and failed to consider the adverse impacts on Oracle and similar customers. The PSC has 30 days to decide whether to grant a rehearing petition, which, if approved, Oracle intends to use as grounds to temporarily halt the judicial review proceedings.