• The Port Washington campus, developed with OpenAI and Vantage, is designed for nearly 1GW and expects customer delivery in 2027
• Oracle is challenging the rules in court, while its BBB- S&P rating remains below the tariff’s A- threshold
The fact
The Public Service Commission of Wisconsin has left in place credit rules under We Energies’ Very Large Customer tariff that Oracle says could require more than $7bn in financial security for its Port Washington data-centre campus. Oracle estimates that maintaining the security would cost more than $100m a year. The security would cover obligations linked to power infrastructure built for the site; it is not an electricity bill.
The tariff applies to customers requiring at least 100MW and has a minimum initial term of 15 years. Customers below its credit-rating threshold must provide security through cash, a letter of credit or another guarantee. The commission said the requirement was intended to prevent the costs of infrastructure built for very large customers from being passed to existing utility customers.
Oracle sued the commission in Ozaukee County Circuit Court on 19 June, seeking to overturn the requirement. S&P lowered Oracle’s credit rating from BBB to BBB- on 9 July, leaving it one notch above non-investment grade and below the tariff’s A- threshold. The Port Washington campus is expected to require nearly 1GW of power, and Oracle says customer delivery is scheduled to begin in the second half of 2027.
The assessment
We Energies may need to build generation and transmission infrastructure to serve a single customer requiring nearly 1GW of power. If Oracle’s expected demand does not materialise, some of those costs could otherwise fall on other utility customers. The collateral requirement is intended to keep that risk with Oracle.
The financial impact will depend on the form of security Oracle is required to provide. A cash deposit would tie up liquidity. A letter of credit or guarantee may avoid a full cash deposit, but it would use bank capacity and incur fees. Oracle’s estimates of more than $7bn in security and $100m in annual costs are not final. The actual burden will depend on the court ruling, the form of security accepted and how long it must remain in place. Oracle has not changed its second-half 2027 delivery target, so there is no evidence that the dispute has delayed the project.
For BTW readers, securing power for the Port Washington campus may require Oracle to reserve cash or borrowing capacity before the site begins serving customers. The final security terms will determine the size and duration of that financing obligation.
What to watch
Watch for the court’s ruling on Oracle’s challenge and any change to the tariff or required security. Disclosure of the final amount, instrument and duration would show how much cash or bank capacity Oracle must commit. Any revision to the second-half 2027 delivery target would indicate whether the dispute has begun to affect project execution.