Tech giant Oracle, a tenant and developer partner of the planned $15 billion Lighthouse Data Center in Port Washington, Wisc., is suing the Wisconsin Public Service Commission.
The lawsuit, filed June 19 in Ozaukee County Circuit Court, seeks to undo credit rating requirements imposed by regulators on Oracle and other very large data center customers that would build custom power plants.
The company says the ruling could cost more than $100 million a year to meet the PSC’s financial security requirements for next-generation facilities that the company estimates could require more than $7 billion in collateral.
Oracle is seeking judicial review of an April PSC ruling aimed at protecting state taxpayers against the risk of increased energy costs or financial failure related to the four-building, one-gigawatt data center campus under construction, as well as other large data centers.
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 provide guarantees for new power plants built to service its facilities or meet rigorous credit rating, liquidity and tangible asset requirements.
Under the PSC requirement, data centers rated below ‘A’ would not be exempt from liquidity and asset tests. Oracle, which has an investment-grade credit rating of BBB, claims the PSC’s decision to impose the high standard was based on off-the-record evidence, exceeded regulators’ jurisdiction and failed to consider the significant adverse impacts the requirement would have on Oracle and other large customers.
Oracle argues that requiring a cash deposit or letter of credit is “substantial and unreasonable.” It is seeking an exemption from the liquidity and asset tests that WEC Energy Group would apply, arguing that it cannot meet those standards.
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Power Wisconsin Forward, a clean energy advocacy group, is asking the PSC to uphold its decision: “Big tech and billionaires don’t need rebates to build data centers in Wisconsin,” it said in a news release.
“These financial security requirements exist for one reason: to ensure that the businesses that benefit from data center development cover their own costs — not Wisconsin’s families and small businesses,” the statement continued.
Oracle says it will put its petition for judicial review on hold if the PSC decides to rehear the case.
As ENR previously reported, the construction team for the $8 billion first phase of the project includes Whiting-Turner Contracting Co., The Weitz Co., a joint venture of Turner Construction and McCarthy Building Cos. and Michels.
