Data Centers
Oracle Challenges Wisconsin Data Center Financing Rule
Tech giant seeks to be exempted from rigorous credit rating standard the firm says could cost it $100-million annually
The planned Lighthouse Data Center in Port Washington, Wis., where Oracle is a tenant and development partner is seen in rendering. It is suing Wisconsin regulators over financial security requirements tied to new power generation for the project.
Tech giant Oracle, a tenant and key partner in the planned $15-billion Lighthouse Data Center in Port Washington, Wisc., is suing the Wisconsin Public Service Commission to undo credit rating requirements the regulator imposed on the firm and other very large data center customers that would build bespoke power plants.
In its lawsuit, filed June 19 in Ozaukee County Circuit Court, Oracle says the ruling could cost it more than $100 million annually to meet the commission financial security requirements for new generation facilities the company estimates could require more than $7 billion in collateral.
Oracle seeks s seeking judicial review of an April ruling by the commission, which is intended to shield state ratepayers against the risk of rising energy costs or financial failure related to the four-building, 1-GW data center campus now under construction, as well as other similar large facilities.
The ruling mandates that "very large customers" of We Energies, which would provide power to the data center and whose parent company is WEC Energy Group, either post collateral for new power plants built to serve their facilities or meet rigorous credit rating, liquidity and tangible asset requirements.
Under the requirement, data centers rated below "A" would not be exempt from liquidity and asset tests. Oracle, which has a BBB investment-grade credit rating from two ratings agencies, contends the commission decision to impose the high standard was based on non-record evidence, exceeded regulators’ jurisdiction, and failed to consider the significant adverse impacts the mandate would have on Oracle and other large customers.
Oracle argues that requiring it to post a cash deposit or letter of credit is "substantial and unreasonable." It seeks an exemption from the liquidity and asset tests that WEC Energy Group would apply, arguing it cannot meet those standards.
Power Wisconsin Forward, a clean-energy advocacy group, is asking the commission to stand by its decision: "Big tech and billionaires do not need discounts to build data centers in Wisconsin," it said in a press release. "These financial security requirements exist for a reason: to make sure the companies that benefit from data center development cover their own costs; not Wisconsin families and small businesses," the statement continued.
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Oracle says it will pause its request for judicial review if the commission decides to rehear the case.
As ENR reported previously, the construction team for the project's $8-billion first phase includes Whiting-Turner Contracting Co., The Weitz Co., a joint venture of Turner Construction and McCarthy Building Cos. and Michels.
