(The Center Square) — Hut 8 has committed $16 million to build closed-loop water infrastructure for its planned West Feliciana Parish data center, a move local officials say is intended to keep the project from straining the parish water system.
The infrastructure would include upgrades needed to serve the facility, including a dedicated line for fire protection and enough water for basic operations such as bathrooms. Parish President Kenny Havard said the system is designed to ensure residents do not see pressure drops if the facility has a fire or other emergency.
“That was the one thing we wanted to make sure of, that we never had any issues,” Havard told The Center Square. “Around the country, that’s the war cry — that these things take all our water.”
Havard said Hut 8’s agreement to pay for a closed-loop system was central to the parish’s support for the project. Similar infrastructure commitments have become a key part of negotiations between local governments and data center companies, which often seek state and local incentives in exchange for large capital investments.
In West Feliciana Parish, the project is expected to rely heavily on a Payment in Lieu of Taxes agreement, or PILOT, which allows companies to receive property tax breaks if they meet certain investment targets.
If the project reaches $10 billion in value, officials estimated normal property taxes would be about $125 million. Under the agreement, the company would receive a 25% break, bringing payments to roughly $90 million.
Those PILOT payments would go to the parish’s industrial development board and be split three ways among the sheriff’s office, the school system and parish government over the next 15 years, Havard said.
Meta secured a similar deal in Richland Parish and has promised to pay for much of the electricity infrastructure tied to its data center. Amazon has also committed to paying for upgraded electricity and water infrastructure in northwest Louisiana.
“We’re excited about it. It’s going to be a win-win-win,” Havard said. “We tried to do it right. We knew the water was a big issue. I have to commend Hut 8 for working with us. Without them doing the closed system, this project would have never happened.”
The $16 million water commitment is separate from other financial calculations tied to the project. Some construction-related tax revenue is still expected, officials said.
The company will also pay for electric infrastructure needed for the first phase, including a switchyard and power lines. Those costs are not expected to fall on taxpayers or be placed into the utility rate base.
“That’s what we need to watch for on all these projects,” Havard said, referring to concerns that utilities could build new power plants or infrastructure for large industrial customers and pass the costs to other ratepayers. “You can’t build power plants unless someone’s going to pay for it.”
The first phase of Hut 8’s project is expected to include about 300 megawatts of power demand, two buildings and more than half a million square feet of development. Construction could require about 250 workers early on for driving and piling work, with larger employment numbers expected as construction ramps up.
Officials hope the first phase can be online in 2027.
Hut 8 is also receiving major sales tax benefits on electronic equipment. Officials said it is difficult to estimate the final amount because the project’s taxable purchases will depend on the final buildout.
Havard said the local government relied heavily on the PILOT structure because the state sales tax exemption means some revenue that might otherwise have been collected will not materialize locally.
Still, officials said the separate $16 million water commitment and the company’s agreement to pay for electric infrastructure were key safeguards.
The broader issue is likely to remain central as Louisiana courts more large data center projects. Lawmakers and regulators have raised questions about whether utilities and local governments are ensuring large industrial customers pay their own way rather than shifting costs to residents and small businesses.
In West Feliciana Parish, officials say Hut 8’s first phase is structured to avoid that problem.
