We Energies, Oracle ask state regulators to loosen financial protections for data centers

We Energies, along with data center developers Vantage Data Centers and Cloverleaf Infrastructure, has petitioned the Wisconsin Public Service Commission (PSC) to amend financial protections within a newly approved special rate structure for data centers. The petition seeks to lower the collateral requirements for large energy users, including Oracle, who do not meet the highest credit rating thresholds, arguing that current stipulations could deter significant data center investment in the state.

The PSC had previously approved a special rate plan for data center-scale customers in We Energies' service territory this spring, which included stricter financial requirements aimed at protecting ratepayers. Oracle, specifically referencing its $15 billion Lighthouse data center campus in Port Washington, stated through its Vice President Julia Robin that under current mandates, it could be forced to post a letter of credit exceeding $7 billion, incurring an annual cost of over $100 million. We Energies spokesperson Brendan Conway supported the petition, claiming the proposed changes would protect customers while fostering economic growth in Wisconsin.

However, the initiative has met with strong opposition from environmental groups like the Sierra Club and ratepayer advocates from the Union of Concerned Scientists and the Citizens Utility Board of Wisconsin. Critics, including Cassie Steiner and Maria Chavez, argue that loosening these protections could transfer financial risks of large artificial intelligence data centers onto residential and small business ratepayers. They point to concerns about Oracle's significant debt financing and high debt-to-equity ratio, cautioning against the volatility of hyperscale data center investments and the potential for an "AI investment bubble."