The CEO of We Energies’ parent company says he has “confidence” that Oracle will meet the collateral requirements imposed on it by state regulators to receive power service in Wisconsin.
WEC Energy Group CEO Scott Lauber told investment analysts in an earnings call yesterday that he did not believe the tech giant’s collateral requirements would be a “long-term” issue for Oracle.
He also said the utility is working with Oracle to make sure the company provides the required collateral; a spokesperson did not have a timeline to share for when that would happen.
The spokesperson noted that data center developers are required to reimburse the utility for any costs incurred to develop the power needed to serve a new facility.
The Public Service Commission has required data center customers that cannot meet certain credit, asset and liquidity benchmarks to post collateral covering the value of new power plants built for those facilities.
Oracle, set to be the primary tenant of Port Washington’s Vantage data center campus, has estimated it will need to post some $7 billion in collateral for power plants serving the data center campus.
It filed a lawsuit last month to overturn the financial security requirements imposed by state regulators and implement looser restrictions originally proposed by We Energies that would have exempted the company from posting collateral.
WEC Energy Group has filed paperwork to intervene in that lawsuit.
Lauber said he did not expect the outcome of the lawsuit to change Oracle’s collateral requirements in the near-term.
He noted that the tech company’s credit rating had dropped since filing the lawsuit below a credit benchmark that We Energies had originally proposed.
“This is more of if they get back to that BBB with their credit, how do they think about their future more long-term,” he said.
Lauber did not announce a new hyperscale data center customer but said the utility “continued to have really good discussions” with potential new very large customers.
He noted that these customers were expected to have smaller power demand than the gigawatt-plus power needs of the Vantage and Microsoft’s Mount Pleasant data center campuses, pegging the potential customers’ needs in the 400-megawatt to 500-megawatt range.
