Meta’s Louisiana Data Center Could Leave Ratepayers Holding the Bill

5.3 GW More Gas for Meta

This week, the Louisiana Public Service Commission is holding a hearing in Docket U-37882  to evaluate Entergy Louisiana’s request to build 5.3 GW of new generation capacity to serve Meta’s $50 billion data center campus in northern Louisiana. This is Meta’s largest data center in its portfolio and one of the largest data centers in the United States. Entergy’s request will bring the total number of gas plants proposed to serve the Meta data center to 10 for a total of 7.5 GW – when combined with the 2.2 GW of combined-cycle capacity that the Commission already approved.

Stranded Asset Risk for Other Ratepayers

Synapse witness, Devi Glick, submitted testimony on behalf of Sierra Club evaluating whether the contract between Entergy and the data center sufficiently protects the rest of Entergy’s ratepayers. She found that the contract creates a large risk for future ratepayers. Specifically, the contract structure risks turning the generators into stranded assets and leaving a large plant balance for other ratepayers to cover at the end of the term. This is because the data center customer is not covering the full cost of the resources needed to serve its load – instead, the customer is covering the incremental cost plus making a contribution to some embedded costs during the life of the contract. But that share of embedded costs and other program contributions is not sufficient to offset the balance that will be left at the end of the contract. Ms. Glick recommended that the Commission reject the application or else amend the application to include a number of provisions to better protect ratepayers.