(The Center Square) – Oracle’s challenge to a power agreement that puts data center companies in charge of paying for an estimated $4 billion in new natural gas projects and $2 billion in new big power lines in both Wisconsin and Michigan’s Upper Peninsula was dropped this week.
The agreement was approved by Wisconsin’s Public Service Commission in May after more than 2,000 customers submitted comments or spoke at public hearings related to the cost of providing energy to data centers.
Oracle, OpenAI and Vantage Data Centers are spending $15 billion in data center investments in Port Washington. We Energies customers in the lawsuit were represented by the Citizens’ Utility Board of Wisconsin.
“CUB is pleased that Oracle has dropped its suit,” Tom Content, the utility watchdog’s executive director, said in a statement. “We were confident the PSC would win and that the consumer protection safeguards the CUB team sought would remain in place.”
CUB argued that there is risk that after the utility builds facilities to serve a data center’s intensive energy needs, at some point prior to the utility collecting all those costs the data center would close.
Similar risks have been voiced related to allowing data centers to enter into tax increment district agreements that return property taxes to the data center companies with full property taxes being paid only when the TID agreements run out.
CUB said that unrecovered costs from utility upgrades would then fall on both the utility and customer if not paid by the data centers.
“This was no technicality,” Content said. “This was no unintended consequence. This was a key plank among the changes the CUB team sought to revamp the WEC data center pricing plan, in order to protect the We Energies customers we represent.”
The agreement also allowed for data centers to be powered by more than just eastern Wisconsin and Upper Peninsula power plants, meaning that more cost-effective wind energy projects in windier areas such as Iowa and Minnesota could be utilized.
