Oracle’s credit rating has been downgraded by S&P Global Ratings from BBB to BBB- due to uncertainty over its investments in artificial intelligence. The downgrade comes as the company is involved in a dispute with Wisconsin’s utility regulator over new credit requirements for data center operators in the state.
Background
The dispute centers on a new rate structure approved by the Wisconsin Public Service Commission (PSC) that requires data center operators like Oracle to pay for the construction of new power plants needed to meet their energy needs. The PSC set a AAA- credit rating threshold for data center operators seeking electric service, which Oracle does not meet.
As a result, Oracle may be required to post steep collateral, potentially exceeding $100 million per year, to receive electric service for its data center in Port Washington. The company has sued the PSC in Ozaukee County Circuit Court, arguing that the credit rating requirements are not needed to prevent harm to other customers or shareholders.
Implications
The downgrade and dispute have significant implications for Oracle’s data center operations in Wisconsin. The company is co-developing a new data center campus in Ozaukee County, and the credit rating requirements may add a hurdle to its efforts to connect the campus to the grid.
The Wisconsin Citizens Utility Board and renewable energy advocacy group Clean Wisconsin have weighed in to support the credit rating requirements, arguing that they are necessary to protect ratepayers from potential losses if a data center operator becomes insolvent.
Original reporting: Wisconsin Watch — read the source article.
