Dozens of southeastern Wisconsin residents, community organizers, local leaders and environmental activists voiced their opposition to a proposal from the electric utility We Energies to raise rates during a series of meetings in Milwaukee Tuesday. 

At a rally outside the We Energies offices Tuesday morning and at a public hearing on the rate increase held by the Wisconsin Public Service Commission on the Marquette University campus in the afternoon, opponents of the planned increase by as much as $22 per month by 2028 complained that the company was raising money that would go to building data center infrastructure and executive salaries on the backs of Milwaukee residents struggling to get by. Opponents also demanded that Wisconsin change direction as the state continues to fall behind its neighbors in renewable energy development. 

The proposed rate increase comes as public attention has focused on the structure of Wisconsin’s energy system and the sources of its power due to widespread opposition to the construction of hyperscale data centers — particularly in the communities of Port Washington and Mount Pleasant. The issue has become a major topic in the ongoing race for governor as both Democrat David Crowley, the Milwaukee County executive, and Republican Tom Tiffany, a member of the U.S. House of Representatives, argue for their vision for the future of data centers and energy in the state. 

Crowley has said he wants to require that data center developers pay the cost of their own energy use while pushing them to construct renewable sources of energy such as utility-scale solar and wind. Tiffany, whose campaign  ads attack “data center David,” has argued that data centers, wind and solar farms are all taking too much of the state’s farmland. 

Voters across Wisconsin have expressed frustration recently with the lack of oversight or regulation of polluting industry. A group of activists in western Wisconsin recently successfully challenged the state Department of Natural Resources’ decision to grant a controversial Pierce County factory farm a permit to expand on the grounds that there weren’t enough protections for local groundwater. 

We Energies’ request to raise rates would increase monthly bills by $13.35 per month in 2027 and another $8.69 per month in 2028, adding up to about $22 more per month after two years, for a household that uses 660 kilowatt-hours per month. 

At the rally in Zeidler Union Square Park, directly in front of the We Energies headquarters, attendees complained that the PSC hearing was being held on the first day of school, when many of the working families who will be most affected by the rate increase are too busy to attend; that the utility has increased rates several times in recent years as the company’s profits have continued to go up; that, on a hot and muggy late summer day in Wisconsin, poor residents in the city would have to choose between cooling their homes and other necessities and that the state’s utility companies have continued to extend the lives of coal and natural gas power plants. 

“I didn’t come here to complain. Y’all know we do not complain. That’s not what we do. We have a reason to be angry, though,” Antonio Butts, executive director of the local non-profit Walnut Way Conservation Corps, said. “They’re asking for $480 million —  $480 million on top of hundreds of millions that they’ve asked for in previous years. We have a right to be angry. We literally have a right to be angry. But being angry has never reduced our energy bill. Not one time.” 

Most of the speakers complained that the utility has continued to reap massive profits and returns to shareholders — and paid its CEO $12 million in 2025 — while many Milwaukee families are struggling to make ends meet. 

“We have a runaway monopoly that are supposed to be stewards of a necessity, a necessity that we all need,” Rev. Steve Tipton, pastor of El Bethel Church of God in Christ on the city’s northwest side, said. “We need to be warm in the winter, and you know how Milwaukee is. Y’all know how Milwaukee is. And we need to be comfortable in the summer. You see how we are sweating right now. So imagine how homes and families and people that are working, people that are working with two and three jobs that are trying to take care of their children and still keep their household together, and still have to deal with a bill where they got to make a choice whether it’s going to be groceries, their medication, or the necessity of energy.” 

Throughout the rally, speakers explicitly tied the fight against the rate increase to the broader fight against climate change and pushing Wisconsin’s energy system to use more renewable energy. 

“Climate change is no longer some distant environmental problem, it is an issue of public health, infrastructure affordability, and ultimately human safety,” Yusuf Adama, a Beloit common council member and environmental justice advocate with Walnut Way, said. “And we continue to see another reason why we need to move from our dependence on volatile fossil fuels like methane gas when our energy systems depend on fuels whose prices can fluctuate because of markets and events far outside the control of other Wisconsinites.”

State Sen. Chris Larson (D-Milwaukee) was at the rally and hearing Tuesday, arguing that government officials should listen to the demands of the activists in Milwaukee on Tuesday and Wisconsinites who are fighting against data centers across the state. With Democrats confident they’ll win control of state government in November, he said he wanted to push for protections against data center-caused increases in energy and water use, cap utility rate increases at 2%, bar utility companies from lobbying and forcing more renewable energy development. 

Larson made that argument as Tiffany’s campaign for governor argues explicitly against renewable energy and for the increasing Wisconsin’s use of fossil fuels. 

“Tom Tiffany is lying through his teeth, or maybe he’s too dumb to realize,” that he’s been deceived by fossil fuel “propaganda,” Larson told the Examiner. “The cheapest form of energy is solar.” 

Adama, of the Beloit common council and Walnut Way, told the Examiner that while Tuesday’s hearing was about the rate increase, it’s important to keep the focus on the “cohesive set of circumstances” that form the state’s energy policies and push for broader policies to fight climate change.

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Microsoft and Wisconsin ratepayer advocates are asking federal regulators to hit the brakes on a proposal to allocate the costs of transmission infrastructure built to serve data centers. 

Both argue that We Energies and the American Transmission Company’s (ATC) recent proposal to federal regulators fails to adequately protect Wisconsinites from picking up the construction bill, among other concerns. 

The utilities’ plan — setting a minimum transmission charge for Microsoft based on its Mount Pleasant data center’s anticipated electricity needs — mirrors elements of a strategy approved by Wisconsin’s Public Service Commission (PSC) earlier this year. 

We Energies and ATC argue the minimum charge will help prevent their other customers from paying for overbuilt infrastructure if the facility uses less electricity than anticipated.

Microsoft and ratepayer advocates, however, argue that the proposal falls short on protecting Wisconsinites from cost shifts and that the two closely related utilities left little room for input from those most affected. 

Who pays for data center transmission upgrades?

ATC anticipates spending more than $500 million to upgrade the Mount Pleasant facility’s connection to the electrical grid. The utility passes infrastructure costs to customers of all kinds through their electrical bills; We Energies, for instance, estimates that transmission-related costs account for about 10% of customers’ bills. 

The PSC can’t require ATC to bill data center developers for the full cost of infrastructure built to serve them. Only the five-member Federal Energy Regulatory Commission (FERC), which oversees interstate transmission, could overhaul billing rules to fully shield other customers from the costs of new lines and substations for data centers.

The PSC signed off on a work-around this spring, requiring We Energies to set a minimum transmission charge for its large data center customers based on their projected electricity use — the same projections used to plan transmission upgrades. 

ATC and We Energies asked FERC earlier this month to approve a one-off transmission billing plan for Microsoft’s Mount Pleasant data center. The arrangement would require We Energies to pay ATC for the data center’s projected transmission capacity and pass that cost to Microsoft. The 15-year arrangement would take effect once ATC completes the infrastructure needed to serve the facility. 

“This is a customer protection mechanism that follows the ‘cost causer, cost payer’ methodology,” an ATC spokesperson wrote in an email to Wisconsin Watch.

Microsoft says proposal leaves gaps

The utilities didn’t consult with Microsoft before filing their plan with federal regulators.

“The entire purpose of these agreements, by ATC’s own description,” is to serve the Mount Pleasant data center, Microsoft’s attorneys wrote in a protest to FERC on Friday. Moving ahead without Microsoft’s input, they added, would risk “the timely interconnection and operation of this infrastructure.”

In their view, the utilities’ current proposal contains “systemic” flaws.

Some, they argue, pose risks to Microsoft’s finances, including an early termination fee that could force the company to pay “excessively more” than the remaining value of the transmission infrastructure if it backs out of the agreement before the 15-year mark.

Both Microsoft and the Citizens Utility Board (CUB) argue other elements of the proposal pose risks to ATC’s other ratepayers, including those outside of We Energies’ territory.

In a separate protest filed Friday, CUB regulatory affairs director Corey Singletary noted that the proposal would base minimum transmission charges on ATC’s standard interconnection rates.

“The electric demands and associated supporting infrastructure investments are so large relative to traditional loads and investments” that ATC will almost certainly undershoot the actual cost of data centers’ transmission needs,  Singletary wrote. 

“While ATC’s proposal would likely be an improvement over the status quo,” he added, it still falls short of shielding the utility’s other customers from data-center-driven transmission costs.

Microsoft’s attorneys echoed those concerns, emphasizing that Microsoft signed the White House’s Ratepayer Protection Pledge this spring: a commitment to “pay for all new power delivery infrastructure upgrades required to service (its) data centers” and “ensure that these expenses are not passed on to the ordinary household.”

Microsoft urges more scrutiny

We Energies’ parent company, WEC Energy Group, is ATC’s largest shareholder.

“A negotiated bilateral contract between them — especially one involving such large sums — should be further scrutinized,” Microsoft’s attorneys wrote.

Microsoft also pointed out that the proposal wouldn’t require the utilities to seek their company’s input before amending some terms of the contract, nor would it “create a clear path for Microsoft (or anyone else) to inquire and scrutinize the scope or prudence of expenditures made on its behalf.” 

Microsoft’s attorneys called that opacity “a recipe for future misunderstanding and litigation.”

Microsoft is asking FERC to send the entire proposal to a settlement judge, creating a venue for all parties to work through their concerns. As an alternative, the company’s attorneys suggested that the commission reject the utilities’ proposal outright. CUB, meanwhile, urged the commission to create a uniform transmission cost allocation process for all large data centers in ATC’s territory — including those in Port Washington and Beaver Dam.

ATC has yet to file a response to the complaints. 

“ATC is reviewing Microsoft’s filing and will respond through the established FERC process to demonstrate that existing customers are fully protected by the agreements,” a spokesperson wrote in an email on Tuesday. “We remain committed to cost transparency and protection of existing customers while ensuring reliable transmission service.”

Microsoft, ratepayer advocates challenge ATC plan for data center transmission costs is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Click here to read highlights from the story

• Microsoft’s new 15-year electric service contract with We Energies includes outdated language limiting where power plants serving its Mount Pleasant data center could be located.
• The Public Service Commission rejected the geographic restriction, which would have limited Microsoft’s access to wind energy from neighboring states.
• We Energies says the commission’s order — not the outdated contract language — will govern Microsoft’s power purchases.
• Consumer advocates question why We Energies asked Microsoft to sign a contract that didn’t reflect regulators’ decision.

Microsoft’s new 15-year electric service contract for its Mount Pleasant data center includes a provision Wisconsin regulators previously rejected. 

Signed last month, the agreement with We Energies specifies that power plants built or purchased to serve data centers must be located in eastern Wisconsin or Michigan’s Upper Peninsula. But Wisconsin’s Public Service Commission (PSC) voted in May to remove those geographic constraints, which critics argued would cut off Microsoft’s access to abundant wind power generated elsewhere in the Midwest and Great Plains. 

We Energies says it will follow the commission’s order — as opposed to the contract’s language — while it works with the commission to resolve the discrepancy. In the meantime, some observers question how an outdated version of a high-stakes contract made it this far.

Where should data centers look for power? 

The mismatch traces back to one of many disagreements that arose during the PSC’s deliberations on a new rate structure for large data center customers: Should those facilities rely on nearby plants alone or be free to tap energy sources elsewhere?

The PSC-approved rate structure allows large data center operators to “subscribe” to new power plants, picking up the bill for purchasing or constructing them in exchange for the right to use the electricity they generate and revenue from selling surplus electricity on the wholesale market.

We Energies argued that those plants should be located as close as possible to the data centers they would serve. 

Longer distances would increase the risk of grid failures disrupting data center operations, WEC Energy Group Director of Planning Jody Arendt told the PSC in January. WEC Energy Group is We Energies’ holding company.

The local power plants would be within the territory of the American Transmission Company (ATC), a transmission utility in which We Energies owns a majority stake — a relationship that could simplify coordinating repairs and upgrades, Arendt said.

Ratepayer advocates and clean energy groups criticized the plan, arguing it would limit data centers’ access to wind energy. 

Electricity generated by onshore wind farms is, by some measures, cheaper than electricity generated by new natural gas plants. The Midwest’s regional grid operator has approved billions of dollars in grid upgrades over the past five years, in part to streamline transmitting wind energy from regions with high winds to population centers and industrial hubs. 

We Energies fully or partially owns a half-dozen planned and operational wind farms in Wisconsin, including the new Badger Hollow wind farm in Iowa and Grant counties. But neighboring states — especially Iowa and Minnesota — have far higher average wind speeds and generate vastly more wind power.

“Any Wisconsin customers should be able to benefit from lower cost resources like the wind profile in southern Minnesota,” Wisconsin Citizens Utility Board Executive Director Tom Content wrote in an email to Wisconsin Watch. 

The PSC ultimately sided with CUB and clean energy groups, striking the location constraints from the data center rate structure it approved in May. 

“Over-indexing on a smaller geographic area comes with its own risks,” said Commissioner Marcus Hawkins, adding that planned grid upgrades could resolve some of the challenges of powering data centers from afar. 

Outdated contract

With the rate structure approved, We Energies sent Microsoft a contract to implement the new rate structure.

Microsoft asked the PSC in June to reopen the case, in part to address “multiple errors or inconsistencies” in We Energies’ contract — including the provision limiting new power plants to eastern Wisconsin and the Upper Peninsula.

We Energies offered to drop the line, among other “ministerial changes that could streamline or improve” the contract.

After the PSC declined to reopen the case, Microsoft signed the contract as-is on July 16. A Microsoft spokesperson declined to comment on the contract.

Because the commission “did not reopen their decision or take up these changes,” the utility still needs to work with the PSC to fix the contracts, We Energies spokesperson Brendan Conway wrote in an email. “We do not have a timeline for when the language will be updated.”

“From a practical perspective,” he added, Microsoft will be held to the PSC-approved rules, meaning it can subscribe to plants outside of eastern Wisconsin and the Upper Peninsula. 

The companies are legally required to abide by the PSC’s terms, commission spokesperson Meghan Sovey-Lashua wrote in an email.

“To the degree there are conflicts” with the PSC’s order, Sovey-Lashua added, “there are procedural options” to bring the issue back to the commission for a resolution.

Ratepayer advocates, meanwhile, wonder why We Energies asked Microsoft to sign an outdated version of the contract in the first place. 

“There’s a basic and common-sense expectation that a utility’s filing would be revised to reflect changes the PSC made to a proposal,” Content wrote, “particularly for an issue that generated a fair amount of discussion during the seven-hour deliberation on this issue.” 

Microsoft has already signed up to purchase electricity from the planned Red Oak Ridge Energy Center in Kenosha County. We Energies is currently asking the PSC for permission to buy the natural gas plant from developer Invenergy for $1.8 billion while Invenergy awaits PSC approval to build the plant. 

We Energies says Microsoft won’t be held to contract terms that conflict with state regulators’ order is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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We Energies reassured shareholders on Wednesday that Oracle’s ongoing dispute with state regulators over new credit rating requirements for data center operators poses no threat to the planned hyperscale data center in Port Washington. 

WEC Energy Group CEO Scott Lauber, head of We Energies’ parent company, told investors during a quarterly earnings call that the Port Washington facility remains on track to come online as soon as late 2027. In a “worst-case scenario” in which Oracle backs out of the project, “there are a lot of opportunities for that site,” Lauber said, “but at this point, I have no indication that’s the case.”

Wisconsin’s Public Service Commission (PSC) in April approved a rate structure for We Energies’ “very large customers” that requires operators like Oracle to pay for the construction of new power plants needed to meet data center energy needs. But constructing a new plant can cost hundreds of millions of dollars, and any unpaid debts tied to the plants could fall on We Energies’ other customers if a data center operator becomes insolvent.

To shield ratepayers from a potential cost shift, the PSC set a AAA- credit rating threshold for data center operators seeking electric service from We Energies. Companies below the threshold must post steep collateral, either in cash or lines of credit, as a backstop.

That requirement could cost Oracle, the co-developer of the Port Washington data center campus alongside OpenAI and Vantage, over $100 million per year in financial security payments. The company held a BBB credit rating when the PSC approved the credit rating standards, largely because of its aggressive borrowing to finance artificial intelligence ventures and risky business relationship with OpenAI. S&P Global Ratings, one of the “Big Three” credit rating agencies responsible for assessing creditworthiness of government and corporate debt, lowered Oracle’s rating to a BBB- on July 9 — the bottom edge of the agency’s “investment-grade” tier. If the company’s credit rating falls further, Lauber said, “we already have all the collateral we need.”

We Energies asked the PSC to reconsider the rule last month, arguing that the added cost could dissuade other companies from operating in Wisconsin. “If the Commission does not reopen its decision on this issue, the implications for Wisconsin would be significant and limit the ability of numerous investment-grade companies to invest in Wisconsin,” the utility’s attorneys wrote in their request. The PSC declined We Energies’ request earlier this month.

Lauber sounded more optimistic about the credit rating requirements on Wednesday. “I don’t think the collateral will be an issue long term,” he said, noting that ratings agencies reacted positively to the credit rating threshold. 

We Energies is currently in talks with at least two other data center operators interested in setting up Wisconsin operations, albeit at far smaller scales than Oracle or Microsoft, which operates a new data center campus in Mount Pleasant. Lauber told shareholders that the credit rating requirements pose no obstacle to those prospective customers. 

Oracle, however, sued the PSC in Ozaukee County Circuit Court last month, asking a judge to “set aside, reverse and remand” the credit rating requirements. The tech giant argues the commission acted outside of its authority in approving the rule and that the AAA- bar isn’t “needed to prevent harm” to We Energies’ other customers.

We Energies is an interested party in that lawsuit, but it did not join Oracle as a plaintiff.

We Energies says Oracle dispute won’t derail Port Washington data center is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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A major national credit rating agency downgraded Oracle’s rating last week, citing uncertainty about the tech giant’s investments in artificial intelligence. The drop comes just weeks after the company sued Wisconsin’s utility regulator over new credit requirements for data center operators in We Energies territory — a lawsuit spotlighting the company’s financial condition.

S&P Global Ratings, one of the “big three” ratings agencies responsible for assessing the creditworthiness of government and corporate debt, lowered Oracle’s rating from a BBB to a BBB- on July 9. The rating places Oracle on the bottom edge of S&P’s “investment-grade” tier; any additional downgrades will land the company’s credit rating in the “high yield” or “junk” tier. 

“Oracle Corp.’s rapidly expanding AI infrastructure business is increasing its overall credit risk,” S&P analysts wrote in an announcement of the downgrade, pointing to high capital spending, “an uncertain path to profitability” and stiff competition as reasons to be “more cautious” in its approach to AI infrastructure businesses. 

Still, S&P isn’t wholly pessimistic about Oracle’s finances. 

“Despite the stretched leverage and cash-flow profile over the next two years, we expect Oracle to demonstrate consistent improvements toward profitability as capacity comes online and business scales,” the analysts added.

Oracle is co-developing a vast new data center campus in Ozaukee County, and its BBB- credit rating adds a hurdle to its efforts to connect the campus’ servers to the grid.

The reason: new rules for data centers seeking electrical service in We Energies territory. Wisconsin’s Public Service Commission (PSC) recently approved a rate structure for We Energies’ “very large customers” that requires operators like Oracle to pay for the construction of new power plants needed to meet data center energy needs.

But constructing a new plant can cost hundreds of millions of dollars, and any unpaid debts tied to the plants could fall to We Energies’ other customers if a data center operator becomes insolvent.

To shield ratepayers from a potential cost shift, the PSC set a AAA- credit rating threshold for data center operators seeking electric service from We Energies. Companies below the threshold must post steep collateral, either in cash or lines of credit, as a backstop.

For Oracle, that could mean paying $100 million or more a year as a condition of receiving electric service for Port Washington servers.

We Energies asked the PSC in June to reconsider the credit requirements, arguing that the rule unfairly penalizes Oracle based on an overly cautious reading of the company’s financial health. 

“In practical terms, tens of billions of dollars in Oracle’s value would need to be destroyed before creditors or counterparties, such as Wisconsin Electric and its other customers, could experience losses,” the utility’s lawyers wrote. 

The PSC declined to reconsider the requirements last week.

Oracle sued the commission in Ozaukee County Circuit Court as a backup to the reopener request. The company’s lawsuit asks Judge Sandy Williams to “set aside, reverse, and remand” the credit rating requirements, arguing that they aren’t “needed to prevent harm” to We Energies’ other customers or shareholders. 

In a response filed July 9, the commission accused Oracle of trying to dodge regulatory scrutiny. The company seeks “to overturn over one-hundred years of established caselaw and allow it to dictate one-off preferential terms of service with the utility, bypassing Commission oversight altogether,” commission attorneys wrote.

Wisconsin’s Citizens Utility Board (CUB) and renewable energy advocacy group Clean Wisconsin also weighed in this week to support the credit ratings requirements. 

“An investment grade credit rating provides little advance warning of financial difficulties that may worsen rapidly,” CUB attorney Daniel Narvey wrote in a position statement filed Monday in Ozaukee County Circuit Court. “If a data center customer suffered financial distress and had not been required to post collateral, (We Energies) and its other customers could be on the hook for billions of dollars of stranded investments.”

Oracle’s stock value has tumbled by more than 25% in the month since it sued the PSC.

Wisconsin isn’t the only state embroiled in a fight over Oracle’s data center operations. In March, Michigan’s Public Service Commission declined to revisit its approval of an electrical service agreement between utility DTE Energy, Oracle and OpenAI. Michigan’s utility regulator approved the contracts in an expedited, uncontested process that drew criticism from ratepayer advocates and Michigan Attorney General Dana Nessel.

Oracle credit rating drops amid Wisconsin fight over data center credit rules is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Wisconsin’s Public Service Commission (PSC) has no plans to reconsider We Energies’ request to loosen credit rating rules for data center developers. 

The commission voted in April to require data center developers with below-threshold credit ratings to provide financial guarantees before receiving electric service from We Energies. Ratepayer advocates say the requirement shields other customers from financial risk if a data center operator can’t afford to pay for infrastructure built on its behalf. 

That requirement could cost tech giant Oracle, the co-developer of a Port Washington data center campus, over $100 million per year. We Energies asked the PSC to reconsider the rule last month, arguing that the added cost could dissuade other companies from operating in Wisconsin.

The three-member commission has until Friday to act on the request. The commissioners did not include the request on Thursday’s meeting agenda, and, as of Thursday evening, had not scheduled a Friday meeting to consider it. State law requires the commission to notify the public of  scheduled meetings at least 24 hours in advance. 

The PSC will instead defend the credit rating requirements in Ozaukee County Circuit Court, where Oracle sued the agency last month.

Guardrails

Commissioners approved the credit rating rules as one of several guardrails in We Energies’ new “very large customer” rate structure to prevent cost shifts from data center developers to the utility’s other customers. 

The new rate structure requires We Energies to bill data center customers alone for power plants built to serve them. A single power plant can cost hundreds of millions of dollars — or, in the case of the proposed Red Oak Ridge plant in the town of Paris, more than a billion dollars. If a data center developer goes bankrupt, We Energies’ other customers could be on the hook for any remaining costs tied to the power plants. 

With that worst-case scenario in mind, the PSC set a credit rating threshold for data center developers seeking We Energies electric service. Credit ratings measure a company’s financial health and likelihood of repaying debts on time. Developers with credit ratings below A- must provide financial guarantees to receive service. Those financial guarantees would help cover costs if a developer runs into financial trouble. 

Wisconsin’s Citizens Utility Board and other ratepayer advocacy groups supported the “belt-and-suspender” approach to protecting smaller customers.

Exemption sought for Oracle

Oracle, a Texas-based cloud computing giant, currently holds a BBB credit rating — a tier below the A- threshold but still considered investment-grade by ratings agencies. The company’s aggressive borrowing in support of its artificial intelligence ventures pushed Oracle’s debt-to-equity ratio above 400% as of May, and its stock price has tumbled more than $50 in the past month alone.

The PSC-approved rate structure would require the Oracle subsidiary involved in the Port Washington project to provide more than $100 million a year in cash deposits or letters of credit to receive We Energies service.

“If the Commission does not reopen its decision on this issue, the implications for Wisconsin would be significant and limit the ability of numerous investment-grade companies to invest in Wisconsin,” We Energies wrote in its June 10 request that the PSC reconsider the credit rating rules. 

The utility urged the commission to exempt companies with “investment-grade” credit ratings, including BBB ratings, and to waive the Oracle subsidiary’s financial backing requirements. 

We Energies maintains that concerns about Oracle’s credit-worthiness are misplaced. 

“In practical terms, tens of billions of dollars in Oracle’s value would need to be destroyed before creditors or counterparties, such as Wisconsin Electric and its other customers, could experience losses,” the utility’s attorneys wrote in their petition.

Friday’s deadline is the commission’s last chance to act on the request, but We Energies doesn’t expect any last-minute action. 

“We are disappointed the commission chose not to revisit the financial support requirements under our Very Large Customer rate,” We Energies spokesperson Brendan Conway wrote in an email to Wisconsin Watch on Thursday. “We believe updating the financial support requirements will help ensure the policy meets the goal we all agree on: protecting customers while supporting jobs and economic growth in Wisconsin.

The environmental advocacy group Clean Wisconsin, on the other hand, applauded the commissioners.

“The Public Service Commission did the right thing when it created this special rate structure for AI data centers, and it’s doing the right thing now by rejecting the petition,” Brett Korte, the nonprofit’s attorney, wrote in a Thursday press release. “This is about protecting We Energies’ other customers — families, small businesses, schools, manufacturers — and shielding them from the risks associated with these enormous energy users.”  

Oracle is asking the Ozaukee County Circuit Court to intervene.

In its June 19 lawsuit, the company argues the commission acted outside its authority and without sufficient evidence to justify the rule. Oracle also maintains that the A- threshold isn’t “needed to prevent harm” to We Energies’ other customers or shareholders.

Microsoft’s questions

Also absent from the PSC’s agenda this week: a request from Microsoft to “clarify” parts of the data center rate structure.

Microsoft, the developer of the new data center campus in Mt. Pleasant, asked the PSC last month about the impact of potential changes to federal rules dictating how transmission utilities spread the construction costs of new infrastructure. 

The five-member Federal Energy Regulatory Commission (FERC) — not the Wisconsin PSC — has jurisdiction over how utilities allocate transmission costs.

The data center boom will require new transmission infrastructure, and FERC has yet to develop new rules to assign the cost of those projects to data center developers. The American Transmission Company, Wisconsin’s largest transmission utility, signaled this spring that it plans to ask FERC to approve a new cost allocation model.

In the meantime, Wisconsin’s PSC approved what commissioner Christi Nieto called a “temporary stopgap measure.” We Energies passes transmission costs to customers based on their electricity use, and the commission-approved rate structure sets a floor for data centers’ transmission bills based on projected electricity needs.

Microsoft argues that the possible federal rule changes create enough “ambiguity” to merit reconsidering how it will be billed for transmission costs after FERC considers new options.

The PSC also had until Friday to act on  Microsoft’s request.

This story was updated July 10 to include information about Microsoft’s We Energies rate structure.

Wisconsin regulators refuse to loosen data center credit rules, setting up Oracle court fight is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

The typical We Energies customer using 660 kilowatt hours of energy per month is paying $144 each month for that power, according to Wisconsin Public Service Commission data. That bill is far higher than most other people in the state and has increased substantially in recent years. 

Frustration with rising energy bills, increasing skepticism about investor-owned utilities, anxiety over the growth of data centers and fears about the rising cost of living led Milwaukee city officials last month to hold a meeting aimed at kickstarting debate about municipalization — the process of a local government taking over utility services. 

In late June, Milwaukee’s Public Transportation, Utilities and Waterways Review Board held its first meeting since 2023 to discuss a city-owned electric utility. 

There are dozens of municipal-owned utilities across Wisconsin providing residents with their water and power. Up north, Superior is in the midst of its own debate over acquiring the local water utility. 

“The overarching concern and preference for municipalization is that there are no shareholders and hence no need for the elevated profits that the investor-owned utilities all receive,” Tom Content, executive director of the Citizens Utility Board of Wisconsin, said in an email, noting that We Energies’ profits range from 10-13% on its various plants and projects. “Municipal utilities by their nature are more responsive to their local customers, because those customers are also the voters who elect the local government, as in the mayor or village chair who appoint the utility commissions.”

State law allows municipal governments to acquire utilities’ property through eminent domain or a negotiated purchase agreement. 

Milwaukee is in the early stages of discussing the possibility. There are serious hurdles,  including the fact that We Energies power generation does not take place within city limits, complications over how Act 10 would affect unionized utility workers and the prospect of facing a well-funded and well-connected opponent. 

“The utilities have been generous donors to the incumbent party, whichever is in power, over the years,” Content said. “The reckoning and awakening of the public to affordability concerns and data centers is shifting the dynamic on this, which is why we see candidates of all stripes taking more pro-consumer positions like we are advocating for.”

He noted recent polling has shown Wisconsinites are against data center development and concerned about the cost of living.

“From CUB’s POV this all argues for an electorate that wants a reliable energy system that they can afford,” he continued. “And for We Energies customers that’s become more problematic because the typical [residential] bill has surged 30% since 2022, with another 14-15% in the offing for the next two years.” 

Milwaukee Ald. Robert Bauman, who along with Ald. Alex Brower led the June meeting to start exploring the issue, told the Examiner that the debate will come down to determining if municipalization will reduce rates while maintaining reliable service. 

“If someone can come forward and say I have a realistic way of structuring your rates so they’re not going up by as high a percentage and your power is just as reliable and there’s more accountability … that accountability is attractive,” Bauman said, noting he already gets calls complaining about the municipal water utility. 

Milwaukee isn’t the first community across the country to consider taking on this fight. Clearwater, Florida,  recently completed a feasibility study to take over its own electric utility.

Residents in Boulder, Colorado, began a fight to municipalize the local Xcel Energy in 2010, largely due to complaints that the company was dragging its feet on shifting to renewable sources of power. Several times over the next decade, local voters approved ballot measures affirming their desire to take control of the utility. 

Ultimately, Boulder’s effort didn’t get across the finish line. But Leslie Glustrom, a Boulder resident who was active in the fight, told the Wisconsin Examiner that it wasn’t a failure. The threat of losing such a large customer base, she said, put enough leverage on Xcel that locals were able to push for significant policy concessions and the company has shifted away from its earlier dependence on fossil fuels. Xcel now states it will retire its final coal plant by 2030. 

“You can achieve very important gains and make progress on very important objectives, independent of whether the municipalization effort succeeds or not,” she said. 

In Michigan, residents of Ann Arbor have had a harder time, mostly because state law gives the power utility a permanent agreement to operate within its boundary area so residents don’t have the same leverage point. 

But the effort to take over the utility has continued and resulted in the establishment of the city’s Sustainable Energy Utility. For now the SEU is running as a pilot in one neighborhood with plans to expand citywide next year. 

Under the program, the city operates a service in which homes are outfitted with solar panels and backup batteries to provide energy for home use. The city still owns and maintains the infrastructure. 

Brian Geiringer, executive director of Ann Arbor for Public Power, told the Examiner that the city’s lack of leverage, the power of the local utility and the poor reliability of the local service have made it attractive to push for full municipalization

“Our options are very limited, in a region where the [Investor-owned utility] has tons of power, both due to their monopoly status, the forever contract, but also in terms of the amount of lobbying they do of our state government,” he said. “We are left with very few options to sort of hold them accountable and really push back at all against their power.”

He added that the SEU was able to get off the ground because Ann Arbor had a well funded sustainability office, but that it offered a low-friction way to begin showing the benefits of public power. 

“In Ann Arbor, the benefits of public power are so massive, in part, because our [investor-owned utility] has done such a poor job.” It has become clear to citizens, he added, that the benefits of the sustainable energy pilot project  “really just start to scratch the surface of what we would be sort of leaving on the table if we don’t pursue full municipalization.”

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Milwaukee’s Public Transportation, Utilities and Waterways Review Board waded into the statewide fight over utility regulation on Wednesday with a three-hour hearing discussing forming a publicly-owned electric utility. 

The proposed starting point: assuming control over We Energies’ infrastructure within city limits.

“Energy networks are best delivered by monopolies,” said Jim Carpenter, a board member. “The problem is that We Energies is a profit-driven monopoly, and sometimes profits get in the way of providing the best solution to a problem.”

The board has no power to recommend action by Milwaukee’s Common Council; Wednesday’s meeting was the board’s first since 2023. Instead, Aldermen Alex Brower and Robert Bauman used the hearing to open a discussion about the viability, risks and potential benefits of a possible city-owned electric utility. Backers and critics alike packed the board room, some eager to weigh in on the proposal.

“Everyone deserves to have savings. Everyone deserves to have the option to have control over their power,” said Cleopatra White, a working-class single mother in Milwaukee’s Southgate neighborhood. 

She said she wanted to show support for creating a publicly-owned utility because it’s an issue that affects everyone in Milwaukee, regardless of political party. 

What is a public utility? 

Wisconsin’s publicly-owned utilities — Manitowoc Public Utilities, for instance — generate roughly 11% of the electricity produced in the state, often with lower electric rates than their investor-owned counterparts. 

Wisconsin law allows municipalities to acquire utilities’ property, but that option is largely untested.

Brower pitched the takeover as a means to shield residents from electrical rate increases. We Energies filed its most recent rate case in April, projecting a roughly 9.3% increase in customers’ electricity rates over the next two years. 

But the plan faces pushback from We Energies and the union representing its workers. They argue that residents benefit from the economies of scale that a large, well-established utility provides.

“Reliability is not created by changing who owns the utility,” said James Meyer, business manager for the International Brotherhood of Electrical Workers (IBEW) Local 2150. “It comes from trained workers, proven emergency response systems and the ability to move crews, equipment and materials quickly when customers need help. Milwaukee has that today, and this proposal puts it at risk.”

We Energies spokesperson Brendan Conway said his company is responsive to ratepayers’ concerns about costs and service. 

“We know many families in Milwaukee are feeling pressure from rising energy costs, and we’re focused on keeping bills low while delivering the reliable energy customers count on every day,” Conway wrote in an email. 

How would a municipal utility be created? 

State law offers two routes for municipalities to assume control of utility infrastructure within their territory: seizing the facilities through eminent domain or negotiating a purchase agreement. 

The eminent domain route would likely require legal action by the city to prove the “necessity of the taking,” attorneys working with the Milwaukee Democratic Socialists of America (DSA) wrote ahead of Wednesday’s hearing. 

Brower won his seat representing District 3 in a special election last April with the backing of Milwaukee’s DSA chapter, which helps organize the “Power to the People” campaign drumming up support for a municipal electric utility. Many of its members attended the hearing. 

Both options would require a referendum and a hearing before Wisconsin’s Public Service Commission to determine a fair price for We Energies’ property. But Milwaukee’s suburbs rely  on much of the same infrastructure as the city, which could block Milwaukee from acquiring shared infrastructure. 

Shorewood Village Manager Rebecca Ewald, whose community shares a substation with Milwaukee, told Wisconsin Watch that she hasn’t discussed the idea with its sponsors. Oak Creek City Administrator Andrew Vickers declined to comment on the plan; his city, which borders Milwaukee’s southern edge, hosts several We Energies power plants. 

Milwaukee itself has only one We Energies power plant: the Valley Power Plant along the Menomonee River near the city’s central business district. It generates enough electricity to meet roughly 10% of Milwaukee’s annual needs, Conway said. 

Brower argues the current lack of generation within city limits wouldn’t hinder his goals. “We have the power to purchase (electricity) on the wholesale markets,” he told Wisconsin Watch.

State law allows municipal utilities to construct generators outside of their boundaries. In Brower’s view, Milwaukee could expand rooftop solar and battery storage to meet some energy needs — possibly sited on the city’s abundant vacant land.

Municipal control of We Energies’ substations and transmission assets could also mean shrinking the pool of customers paying for that infrastructure, including We Energies’ new mixed-use Juneautown substation in the city’s Historic Third Ward.

Act 10, a 2011 state law stripping most public-sector employees of collective bargaining rights,  also complicates the picture. 

Brower believes a Milwaukee public electrical utility should aim to hire the We Energies workers who currently operate infrastructure within the city, but doing so would make them public-sector employees. “We don’t want that,” he said.

“We are seriously considering a legal option of outsourcing the day-to-day management to a third-party entity once we acquire the utility infrastructure,” he added — a possible workaround to ensure that  employees under a municipal utility would retain their current rights. 

His pitch has yet to sway the IBEW, which generally supports We Energies in cases before the PSC and Legislature. 

“If the workers are forced into uncertainty over pensions, healthcare, seniority, contracts and union protections, many may not move to the city from the utility,” said Sam Rozenberg, an IBEW member and We Energies dispatcher who spoke at the hearing. “They have options. And if they leave, Milwaukee loses more than employees. It loses the people who know this system and know how to restore service safely.”

While there is no guarantee current We Energies workers would join a new municipal electric utility, Ursula Schryver, senior vice president of education, training and events for the American Public Power Association, told the board that Milwaukee could tap into a national network of public utilities to respond to natural disasters.

Other cities explore municipal utilities

Milwaukee isn’t the only city exploring this option. 

St. Petersburg, Florida’s city council approved a feasibility study earlier this year. Ann Arbor, Michigan’s city council voted down a proposal to study a municipal takeover of electric infrastructure last spring, though the plan’s backers now plan to take the matter to voters as a ballot petition.

A similar study commissioned by the San Diego, California city council produced an $8 billion cost estimate,  prompting some city leaders to balk at the idea. The same study also suggested that San Diego residents could recoup the costs in the long run. 

Brower said  San Diego’s deliberations offer a chance to pressure an investor-owned utility to make concessions. Even if the possibility of a municipal takeover in Milwaukee acts as a bargaining chip during an upcoming rate case, he said, “there’s power in winning concessions. But we are fighting for the entire thing.”

Samuel Mendoza, who recently moved with his wife to Milwaukee near the Harambee neighborhood, discussed his experience working in public works for the City of Los Angeles. While he didn’t work under the Los Angeles Department of Water and Power, he said the municipal utility paid its nearly 12,000 workers well.

“I’m surprised coming here that there wasn’t already something municipal,” Mendoza said. “Especially things that are really specific to the city, you’d want to have a utility company that could handle those issues instead of just being so widespread.” 

What happens next?

We Energies was absent from the hearing. Brower invited the company to join a meeting with the board or the city’s representatives to make its case. 

As for next steps, Bauman suggested exploring the public utility concept through a task force made up of members of the Common Council, mayoral administration and Department of Public Works and then requesting that the council fund a feasibility study.

Could Milwaukee create its own electric utility? Officials explore taking over We Energies infrastructure within city limits  is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Tech firm Oracle is suing Wisconsin’s Public Service Commission (PSC) in Ozaukee County Circuit Court, opening a new front in a fight over financial protections for Wisconsin ratepayers. 

The June 19 lawsuit comes as Oracle and We Energies — the utility set to power the company’s planned data center in Port Washington — are asking the PSC to reconsider credit rating requirements for data center developers that could cost the company millions of dollars a year.

Oracle’s lawsuit seeks to accomplish the same ends through the courts.

The PSC approved We Energies’ “very large customer” rate structure in April, requiring the utility to exclusively bill data center customers for new energy generation infrastructure needed to serve them, among other protections for existing ratepayers. The agreement also requires data center developers with credit ratings below A- to post financial guarantees to reduce the risk of shifting costs to other customers if a developer runs into financial trouble.

Oracle currently holds a BBB credit rating — a tier below the PSC standard, but still considered investment-grade by ratings agencies — largely because of aggressive borrowing to finance new artificial intelligence infrastructure. Under the current rate structure, the Oracle subsidiary involved in the Port Washington project would need to provide cash deposits or letters of credit exceeding $100 million per year to receive service from We Energies.

“If the Commission does not reopen its decision on this issue, the implications for Wisconsin would be significant and limit the ability of numerous investment-grade companies to invest in Wisconsin,” the utility’s attorneys wrote in a June 10 request to reopen the case.

We Energies also contended that Oracle runs little risk of defaulting on its obligations.

“Tens of billions of dollars in Oracle’s value would need to be destroyed before creditors and counterparties, such as Wisconsin Electric and its other customers, could experience losses,” the utility’s attorneys wrote. Even in a bankruptcy, they added, generators built to serve data centers “will still have value and will be able to provide electricity to other customers.” 

We Energies and Oracle asked the PSC to consider a stepped approach to security requirements that eases the burden on companies with “investment-grade” credit ratings, including BBB ratings, and to waive the Oracle subsidiary’s financial backing obligations. 

In its lawsuit, Oracle asked the court to “set aside, reverse and remand” the credit rating limits in the PSC-approved agreement, arguing that the commission acted outside of its authority and without sufficient evidence to justify the rule. The company maintains that the A- bar isn’t “needed to prevent harm” to We Energies’ other customers or shareholders, and that the commission “failed to consider the significant, adverse impacts” of the requirement on Oracle.

Ratepayer advocates and clean energy groups support the PSC credit rating requirements, and some of the same groups are pushing back against Oracle’s efforts to reopen the issue. 

“We believe that PSC did its job,” Clean Wisconsin spokesperson Amy Barrilleaux said. “It cannot leave all these other thousands of customers vulnerable.”

The company hired attorneys from the Madison office of law firm Husch Blackwell. One of those attorneys, David Zoppo, has previously represented investor-owned utilities before the PSC. Oracle’s attorneys did not immediately respond to requests for comment. 

The credit rating dispute could shape future electrical service contracts between data center developers and utilities. 

Northern States Power Company, a subsidiary of utility giant Xcel Energy that provides electrical service to parts of northwestern Wisconsin, asked the PSC on Monday for its own “very large” customer rate structure. 

That proposal would set the credit rating bar at BBB-,  the lowest investment-grade category. Potential data center customers below that threshold would need to provide additional financial guarantees.

Oracle sues Wisconsin regulators as it seeks relief from data center credit requirements is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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We Energies this week asked Wisconsin’s Public Service Commission to revisit its recent ruling on electrical rates for the utility’s data center customers, arguing new credit rating requirements create an undue burden for data center operators. 

The PSC approved We Energies’ “very large customer” rate structure in April, requiring the utility to exclusively bill data center customers for new energy generation infrastructure needed to serve them, among other protections for existing ratepayers. The agreement also requires data center developers with credit ratings below A- to post financial guarantees, either in cash or lines of credit, to reduce the risk of shifting costs to other customers if a developer runs into financial trouble. 

That requirement poses a problem for Oracle, which is partnering with OpenAI and Vantage to develop a vast data center campus in Port Washington.

The cloud computing giant currently holds a BBB credit rating — a tier below the A- bar set by the PSC, but still considered investment-grade by ratings agencies — largely due to aggressive borrowing to finance new artificial intelligence infrastructure. Under the current rate structure, the Oracle subsidiary involved in the Port Washington project would need to provide cash deposits or letters of credit exceeding $100 million per year to receive We Energies service.

“If the Commission does not reopen its decision on this issue, the implications for Wisconsin would be significant and limit the ability of numerous investment-grade companies to invest in Wisconsin,” the utility’s attorneys wrote in a June 10 filing. 

Several other major technology companies — including Intel, Tesla and Micron — hold BBB credit ratings, the attorneys noted. 

Ratepayer advocates backed credit limits for data center developers during the PSC’s deliberations on the case. In written testimony to the PSC in January, Wisconsin Citizens Utility Board chief economist Steve Kihm pointed to energy trading giant Enron, which held a BBB credit rating just a year before its 2001 bankruptcy, as a reason to be cautious with financial commitments from high-dollar investors. 

In its request to reopen the case, We Energies argued that the risks of Oracle or other tech giants defaulting on obligations are extremely low. 

“Tens of billions of dollars in Oracle’s value would need to be destroyed before creditors and counterparties, such as Wisconsin Electric and its other customers, could experience losses,” the utility’s attorneys wrote. Even in a bankruptcy, they added, generators built to serve data centers “will still have value and will be able to provide electricity to other customers” — as opposed to a scenario in which the generators sit idle while solvent ratepayers cover the debts We Energies incurred to build them.

We Energies and Oracle asked the PSC to consider a stepped approach to security requirements that eases the burden on companies with “investment-grade” credit ratings, including BBB ratings, and to waive the Oracle subsidiary’s financial backing obligations. The utility argued that its proposed waiver would still offer greater protections than those required from Meta in its recent agreement with Wisconsin Power and Light, a subsidiary of Alliant Energy.

But Union of Concerned Scientists energy analyst Maria Chavez pointed out that We Energies’ arrangements with new hyperscale data center customers differ from Meta’s one-off service agreement with Alliant. Meta isn’t “specifically asking for extra generation capacity assets to be added,” she said, whereas the Port Washington data center campus — and Microsoft’s data center in Mount Pleasant — will require new, dedicated energy sources. 

“The greater risk to ratepayers,” she added, “the more reason to have a high standard for financial security requirements.”

We Energies and Oracle urged the commission to “move quickly” on the issue to “provide certainty for generational investments that are currently moving forward in this state.”

Meanwhile, Oracle’s share value tumbled this week amid uncertainty about its data center investments. The company’s debt-to-equity ratio exceeded 400% as of May, whereas other hyperscale data operators maintain ratios of 80% or lower.

We Energies asks Wisconsin regulators to ease data center credit standards is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.