{"slug": "oracle-says-one-ai-data-centre-could-cost-it-a-7bn-power-guarantee", "title": "Oracle says one AI data centre could cost it a $7bn power guarantee", "summary": "Oracle said in a sworn affidavit that Wisconsin's Public Service Commission rules would force it to post a $7 billion letter of credit for a nearly one-gigawatt AI data centre in Port Washington, costing over $100 million annually. The commission tightened terms in May, stripping utilities' power to waive the guarantee and setting an A-/A3 credit rating exemption bar that Oracle, recently downgraded to BBB- by S&P, cannot meet. Oracle has offered a $700 million letter of credit with a parent guaranty, but the regulator has declined to reopen the decision, citing protection for ratepayers.", "body_md": "Oracle is building a huge AI data centre in Port Washington, Wisconsin, with Vantage and OpenAI. The nearly one-gigawatt Lighthouse Campus is a roughly $15 billion project. To get the electricity to run it, though, Oracle first has to satisfy the local regulator, and that is proving expensive.\n\nIn a sworn [affidavit](https://www.wpr.org/wp-content/uploads/2026/06/Oracle-Testimony.pdf), Oracle says the rules would force it to post a letter of credit “exceeding $7 billion,” at an annual cost that “could exceed $100 million.”\n\n## Why the regulator won’t budge\n\nThe Public Service Commission of Wisconsin tightened the terms in May. It stripped the utility’s power to waive the guarantee case by case. It also set an exemption bar few can clear: an A-/A3 credit rating.\n\nThe commission has since “declined to take action” on Oracle’s petition to reopen the decision, [telling the Financial Times](https://www.ft.com/content/b37030b6-bda8-4ba9-8e08-e6b88687b8f5) the rule protects existing customers. The logic is simple. A giant data centre books a whole power plant’s worth of [generation](https://thenextweb.com/news/ai-data-centres-gas-plants-clean-energy-fight). If it walks away, someone pays. The regulator wants that someone not to be ordinary [ratepayers](https://thenextweb.com/news/ai-data-centre-backlash-amazon-engineers-ferc).\n\n## The awkward timing\n\nOracle’s whole case is that it is rock-solid. The market just wobbled on that. On 9 July, [S&P cut Oracle](https://www.spglobal.com/ratings/en/regulatory/article/-/view/sourceId/101695609) to BBB-, from BBB, citing its AI-infrastructure spending and weaker cash flow.\n\nThat sits below the A-/A3 exemption bar. And it lands as Oracle burns cash. The company has guided capital spending to $90bn to $95bn this fiscal year, with a forecast free-cash-flow deficit near $42 billion.\n\nThere is a bigger shadow, too: OpenAI. S&P estimates the startup makes up about half of Oracle’s $638 billion in booked future revenue. If OpenAI cannot pay, S&P warns, Oracle could be left with [data-centre leases](https://thenextweb.com/news/blackrock-12bn-meta-el-paso-data-centre-debt) it cannot fill. That is the exact default risk Wisconsin is guarding against.\n\n## Oracle’s pitch\n\nOracle is not taking it quietly. Its affidavit argues that BBB firms meet their obligations 99.87% of the time. It notes Oracle is one of the 20 largest companies in the world, with around $600 billion in equity. It also raised $30 billion in a single day this year.\n\nSo it has offered a deal: post 10%, about $700 million, as a letter of credit, and cover the rest with a parent guaranty. It also plays the national-security card, arguing that [China](https://thenextweb.com/news/china-295-billion-ai-data-centre-plan) is racing ahead on grid and AI while US projects snag on red tape.\n\n## A fight coming everywhere\n\nThis is bigger than one campus. As AI data centres balloon, regulators are asking who carries the risk if the bill outlives the [boom](https://thenextweb.com/news/ai-memory-crunch-boom-bust-2028). Wisconsin’s answer is to make the tech giant, not the town, post the collateral. Whether that shields ratepayers or just pushes builders to another state is the question everyone is about to face.\n\n## Get the TNW newsletter\n\nGet the most important tech news in your inbox each week.", "url": "https://wpnews.pro/news/oracle-says-one-ai-data-centre-could-cost-it-a-7bn-power-guarantee", "canonical_source": "https://thenextweb.com/news/oracle-wisconsin-datacentre-power-7-billion-collateral", "published_at": "2026-07-22 13:16:19+00:00", "updated_at": "2026-07-22 14:01:25.059559+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-policy"], "entities": ["Oracle", "Vantage", "OpenAI", "Public Service Commission of Wisconsin", "S&P", "Financial Times", "Port Washington", "Wisconsin"], "alternates": {"html": "https://wpnews.pro/news/oracle-says-one-ai-data-centre-could-cost-it-a-7bn-power-guarantee", "markdown": "https://wpnews.pro/news/oracle-says-one-ai-data-centre-could-cost-it-a-7bn-power-guarantee.md", "text": "https://wpnews.pro/news/oracle-says-one-ai-data-centre-could-cost-it-a-7bn-power-guarantee.txt", "jsonld": "https://wpnews.pro/news/oracle-says-one-ai-data-centre-could-cost-it-a-7bn-power-guarantee.jsonld"}}