* Jerusalem Post…

Now it appears that the complex financial situation in which Oracle finds itself is endangering one of its flagship projects. The company is involved in planning a massive, nearly one-gigawatt data center in Port Washington, Wisconsin, meant to supply computing power for the OpenAI contract.

However, the Public Service Commission of Wisconsin refused to ease financial collateral requirements, which are designed to ensure that private electricity consumers are not forced to absorb costs in the event of the facility’s failure or closure.

Under local regulations for large consumers, a data center operator whose S&P credit rating drops below A- is required to provide collateral covering the electrical infrastructure built for it.

When the requirements were reviewed, Oracle’s rating stood at BBB and was subsequently downgraded to BBB-. The rating agency attributed the downgrade to heavy AI spending and uncertainty regarding the ability to generate profits from it.

As a result, Oracle is now required to provide cash collateral or a letter of credit in the astronomical sum of over $7 billion just to connect the building to the power grid, a setup whose ongoing maintenance will cost the company more than $100 million annually.

Oracle petitioned the court against the requirement, arguing that these financing costs would deter future investment in the state, while emphasizing its commitment to the project, which carries an estimated value of about $15 billion.

Regulators, on the other hand, remained firm in their stance, clarifying that existing customers should not subsidize data centers. This issue is not limited to Wisconsin: At least 24 US states have already approved special rates, minimum conditions, exit penalties, and collateral requirements for heavy electricity consumers.

* I reached out to the Citizens Utility Board to ask if Illinois is one of those 24 states…

• Illinois is NOT one of those states–and that’s why CUB supports passage of the POWER Act, which would hold data centers accountable for their costs.

• Current Illinois policies do not sufficiently protect everyday electricity customers from data center-related costs. The ICC is currently examining the issue, but we need clear statutory guardrails in place.

• The POWER Act offers a comprehensive solution. It would create a standardized, statewide requirement for utilities to make data centers their own rate class. This would assure transparency–eliminate closed door deals between utilities and Big Tech–and it would protect residential customers from covering any data center-related costs on the delivery side of bills.

• The POWER Act also would protect consumers from spikes on the supply side of the bill (like what we’re seeing now) by requiring data centers to bring their own new capacity (or reduce their usage during peak hours) and bring their own new clean energy (or pay the real cost for the State to do it).

Thoughts?