Louisiana regulators fast-track Entergy proposal tied to Meta data center

Louisiana regulators voted on April 15 to fast-track a massive $21 billion Entergy proposal tied to Meta’s second planned data center. The power would support Meta’s proposed Richland Parish data center, one of the largest single energy requests in state history, and the commission is expected to consider the full application in December.

Entergy filed an application on March 25 to seek the Lightning Amendment route and to demonstrate that it should be allowed to proceed through this process and meet all requirements. The Louisiana Public Service Commission’s new approach, approved late last year, creates a fast track for utility companies seeking to build power plants and other infrastructure in response to a large, energy-intensive customer’s request to connect to the grid. During the April 15 meeting, the vote was 3-1, with Commissioner Davante Lewis opposed.

The two main substantive requirements for the fast-track review are that the utility must have an electricity supply agreement with the data center with a minimum 15-year term, and that the data center must commit to covering at least half of the cost of the new power plant. Consumer advocates said bypassing parts of the standard review process removes an extra layer of review on a project with major financial stakes, and said the remaining costs could fall on Entergy customers statewide.

The new policy clears the way for potentially more than half of such costs to be passed to other ratepayers. One analysis said ratepayers could fund as much as 75% of capital costs because electricity infrastructure typically lasts for decades and is paid for by ratepayers until it fully depreciates, while a proposed data-center-serving gas power plant does not fully depreciate over 15 years and typically depreciates over a much longer period, around 30 years or more.

New modeling by the Union of Concerned Scientists found that over the next 15 years, Louisiana’s wholesale electricity system costs could be a cumulative $14 billion to $26 billion higher than they would be without data center growth. The analysis said these costs are only at the wholesale level, essentially the costs to build and operate large-scale power plants and transmission lines, and do not reflect ratemaking, the process whereby those wholesale costs are allocated to residents and other businesses.

The same analysis said Louisiana does not have comprehensive protections to insulate ratepayers from data center-triggered costs. It said data centers’ projected impact on the average Louisiana utility bill is uncertain because that depends on how the commission allocates wholesale electricity system costs between different types of customers, but with electricity system costs potentially $26 billion higher due to data center load, Louisianans are at risk of substantially subsidizing AI ventures.

About 75% of Louisiana’s electricity generation is currently from fossil gas power plants, making it one of the most gas-reliant states in the nation. Under current policies, the analysis said, the state will meet growing demand with even more gas, and the grid’s overdependence on gas would sustain into at least the 2040s, making up roughly two-thirds of the electricity mix in 2041 modeling results.

Entergy said the agreement is expected to save customers $2 billion statewide. Supporters of the project pointed to potential jobs, infrastructure growth, and claimed savings tied to the development, while Lewis said he needed proof and documentation before he could support the request.