Entergy and opponents of its plans to build enough power to service a massive expansion of Meta’s north Louisiana data center disagreed Wednesday during the start of a multiday hearing over whether the company should spend billions on seven new proposed power plants and other infrastructure.
Entergy has already reached a settlement with the staff of the Louisiana Public Service Commission over its plans, which include constructing seven new gas-fired power plants in Richland and Pointe Coupee parishes, along with transmission lines, solar farms and batteries.
An administrative law judge heard arguments Wednesday over whether the deal should be approved, and the Louisiana Public Service Commission will ultimately vote later this year on whether to OK the settlement. The case puts Louisiana at the center of a national debate over AI, the data centers being built to support the technology and the massive amounts of electric infrastructure necessary to power them.
Entergy CEO Phillip May testified Wednesday that the proposal for the data center expansion, known as Hyperion, is a “transformational investment” for Louisiana and has plenty of protections for ratepayers. May also disclosed for the first time the amount of power Meta will use, 4,500 megawatts, representing roughly four times the amount of power the city of New Orleans uses.
Entergy had closely guarded the figure, over objections from opponents who said it was crucial to understanding whether Entergy’s plans are prudent.
“We are in a power-first world where speed to power is what will drive who wins economic opportunity for their communities,” May said at the hearing Wednesday. “This is an opportunity to change the trajectory of the state’s economy for generations to come.”
Nonprofit and advocacy groups, including the Alliance for Affordable Energy, the Sierra Club and the Union of Concerned Scientists, have argued against the settlement. They have warned Entergy’s plans could force residents to pick up the tab on unnecessary power bills if Meta leaves at the end of the 20-year contract.
Susan Miller, an attorney for the Alliance for Affordable Energy and the Union of Concerned Scientists, noted that some critics argue “data centers are being overbuilt,” will not be profitable and could be a liability in the future.
“Has Entergy looked into that at all?” she asked May.
“I don’t know that we have exactly looked into that,” May said, countering that Meta receives revenue from sources unrelated to AI.
May has argued the contract Meta signed protects ratepayers by ensuring Meta pays for its power even if it leaves early.
Melanie Verzwyvelt, the Public Service Commission’s chief administrative law judge, is overseeing the case and is expected to issue a report on the proceedings. The PSC, made up of elected members who have largely supported the Meta data center, will have the ultimate power to approve or reject the plans.
A host of states have issued moratoriums on data centers as national polls show public opinion swinging against them, but Gov. Jeff Landry, most of the PSC and many other elected officials in Louisiana have continued to embrace them. Landry released a video Tuesday in front of Hut 8’s data center being built in St. Francisville, touting it as an economic development win.
May, of Entergy, said in an editorial board meeting this week with The Times-Picayune | The Advocate that he’s confident regulators will ultimately approve Entergy’s plans. Those include infrastructure for a multi-billion dollar expansion of Meta’s data center in Richland Parish, bringing the cost of Meta’s data center to $50 billion.
The settlement reached by Entergy and the PSC staff, submitted into the record in late September, lets Entergy bypass the traditional rules for building new power plants to speed up the build out. If the settlement gets the greenlight, Entergy can move forward with building seven new gas-fired power plants, three battery storage systems and other infrastructure without being required to go through a bid process typically required to ensure the utility is choosing the lowest-cost option.
Three of the power plants will be depreciated over 32 years, meaning customers could be on the hook for several billion dollars in costs if Meta leaves after the 20-year contract is up. Entergy argues the company would still need those power plants for the entire system because of plant retirements in the coming decades.
Four of the five members of the PSC have previously voted in support of Entergy’s plans for Meta’s data center, while Democratic Commissioner Davante Lewis has raised concerns about the plans and whether residents will be on the hook for costs at the end of the contract.
Entergy’s plans to support Meta’s data center have already caused controversy in north Louisiana and beyond. The company is using expropriation laws to try to buy up properties around where it wants to build massive transmission lines, a move that has prompted backlash from landowners. Entergy and Public Service Commissioner Mike Francis held a town hall last week in Jena at which dozens of landowners complained about Entergy’s plans.
Entergy’s proposed acquisition of a gas-fired power plant in Texas called Cottonwood drew a rebuke in June from a consultant for the PSC, who analyzed the deal and found it would effectively mean residents foot the bill for some of Meta’s power needs. Meta and Entergy denied the consultant’s report.
Plans for the Cottonwood plant are now on pause. May declined to offer an update on the status of the deal Tuesday.
Meta and other tech companies have promised to pay for their own power needs, and Landry has sought to quell voter concerns through an executive order. The order makes it a requirement for companies to pay for their own power in order to gain access to a lucrative tax break Landry and state lawmakers approved for data centers.
So far, data center developers here have claimed $39 million in sales tax rebates through the new program, according to data provided by the Louisiana Department of Revenue in response to a public records request. The number is expected to grow into the billions in the coming years.
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