Wisconsin PSC Lets We Energies' Bid to Ease Data Center Collateral Lapse; Oracle's Fight Over the A- Rule Moves to Court

Thursday’s open meeting agenda at the Public Service Commission of Wisconsin did not list it, and no Friday meeting was noticed ^[7]. That silence is the decision. A June 10 petition from We Energies and two data center developers to loosen the collateral rules in the utility’s new tariff for very large customers runs out its 30 days today and is denied by operation of law ^[5,7,8]. The customer most affected, Oracle, had already gone to court ^[5].

The load behind the dispute is the Lighthouse Data Center Campus in Port Washington, which Oracle describes as a nearly one-gigawatt campus on about 672 acres, developed with Vantage Data Centers and OpenAI ^[5].

What the Commission settled in May, and what it left alone this week

The case is Docket 6630-TE-113, Wisconsin Electric Power Company’s application for a Very Large Customer (VLC) tariff and a companion Bespoke Resources tariff, filed March 31, 2025 ^[1]. The Commission ruled from the bench on April 24 and issued its Final Decision on May 21 ^[1,2]. It cut the eligibility threshold from the 500 MW We Energies proposed to 100 MW, set a 15-year minimum initial term, and dropped a capacity-only option under which data centers would have paid 75 percent of a generating facility’s costs ^[1,2]. The decision describes the load growth in the application as the energy equivalent of adding “half or more of another applicant system in southeastern Wisconsin over the next five years” ^[1].

The fight is over two sentences on pages 42 to 44. A VLC must post security, defined as the net book value of dedicated distribution facilities, plus 1.3 times 24 months of its tariff charges, plus the net book value of the Bespoke Resources it subscribes to ^[1]. We Energies proposed exempting customers rated BBB from S&P or Baa2 from Moody’s that also passed a net worth or liquidity test, and keeping “sole discretion” to waive the requirements ^[1,5]. The Commission struck the discretion and raised the exemption to A- and A3, citing testimony from Microsoft and the Citizens Utility Board about exemptions approved in Indiana and Ohio ^[1].

Nothing about the tariff changes today. The petition asked for two things, and the Commission granted neither ^[3,8].

What the A- line does to cost

Oracle Corporation is rated BBB by S&P and Baa2 by Moody’s, two notches below the new line ^[3]. The customer at Port Washington is its subsidiary, Oracle America Cloud Services LLC, which has no rating of its own ^[3]. Under the tariff as approved, that subsidiary posts the full VLC Security as cash or a letter of credit ^[3]. Oracle says the cost of doing so “could exceed $100 million annually” ^[5]. The joint petition puts the VLC Security itself at “approximately $700 million at its highest level” ^[3].

The petitioners’ proposed fix was a graduated table ^[3]:

• A-/A3 or higher: 0 percent in cash or letter of credit
• BBB+/Baa1: 5 percent
• BBB/Baa2: 10 percent

The rest would be covered by a parent guaranty ^[3]. We Energies and Oracle had already agreed, after the May decision, to a 90 percent parent guaranty and 10 percent letter of credit or cash for the Lighthouse service agreements, with full security required if Oracle’s rating drops ^[3]. The petition notes that the original proposal would have required no cash at all from a BBB customer, so the table asks for more than We Energies first offered ^[3].

Where the risk lands is the whole question. The tariffs are approved under Wis. Stat. § 196.192, which requires a finding that the rate will not harm shareholders or customers who are not on it ^[4,5]. Collateral is what stands between those customers and a stranded dedicated plant; Wisconsin Watch cites the proposed Red Oak Ridge plant in the town of Paris as one built for these customers at a cost of more than a billion dollars ^[7].

Where the sides stand

We Energies, Vantage and Cloverleaf argued that the May decision’s credit section “does not cite to any record evidence,” that the Indiana and Ohio decisions were never in the record, and that Microsoft’s testimony did not discuss any rating other than investment grade ^[3]. They named Intel, Tesla, Micron and Uber as BBB-rated companies that would face the same full posting as a company rated D if they wanted a 100 MW data center in the territory ^[3]. “If the Commission does not reopen its decision on this issue, the implications for Wisconsin would be significant,” they wrote ^[3].

Oracle points to its roughly $40 billion in cash and an equity value of almost $600 billion, and argues that “tens of billions of dollars in Oracle’s value would need to be destroyed” before the utility or its other customers could lose money ^[3]. Its court petition says the A- threshold rests on non-record evidence and that the Commission never found the original terms would harm anyone ^[5].

Clean Wisconsin answered that the Commission did explain itself: it shared CUB’s concern about overly broad discretion and narrowed the exemption because of the risk of agreements “with potentially risky VLCs” ^[4]. It added a fact from after the record closed. Citing Reuters, it said Oracle’s stock fell as much as 12 percent on June 10, a $72 billion loss in value, as investors questioned its AI spending and debt plans ^[4]. Its attorney, Brett Korte, said Friday that the Commission “did the right thing when it created this special rate structure for AI data centers” ^[8].

Ratepayer advocates. CUB economist Steve Kihm pointed in January testimony to Enron, rated BBB a year before its 2001 bankruptcy, Wisconsin Watch reported ^[6]. Maria Chavez of the Union of Concerned Scientists distinguished Meta’s agreement with Alliant subsidiary Wisconsin Power and Light, which the petitioners held up as a lighter model, because Meta is not asking for dedicated new generation the way Port Washington and Microsoft’s Mount Pleasant campus are ^[3,6].

What I’m watching

Oracle’s case in Ozaukee County, No. 2026CV000256. Oracle asks the court to restore the BBB terms We Energies proposed ^[5]. Oracle was not a party before the Commission, and its petition says it had planned to seek a stay only if rehearing were granted ^[5]. The Commission will defend the rule there, according to Wisconsin Watch ^[7].

The other petitioners’ clock. A timely rehearing petition paused judicial review for We Energies, Vantage and Cloverleaf; under the Final Decision’s notice, their 30 days to go to court run from today’s denial by operation of law ^[1,5]. Whether they join Oracle is the next filing to look for.