(The Center Square) – Louisiana utility regulators on Wednesday approved Entergy Louisiana’s plan to build new natural gas plants and transmission lines to power a $10 billion Meta data center in Richland Parish.
The Louisiana Public Service Commission voted to authorize the proposal in a settlement backed by commission staff, Walmart, the Sierra Club, and the Southern Renewable Energy Association. The only dissenting vote came from Commissioner Davonte Lewis.
Commissioner Foster Campbell, representing northeast Louisiana where the project will be built, praised the deal.
“I’m not for it 10%,” Campbell said. “I’m not for it 100%. I’m for it 1,000%. I want to see something happen for northeast Louisiana and this will do it.”
Larry Hand, regulatory affairs manager for Entergy Louisiana, told commissioners the project was the product of years of negotiation with Meta, which initially was not considering Louisiana for its data center.
“We engaged with Meta and said, ‘What is it we can do to get you to consider Louisiana?'” Hand said. “We worked with our state partners, our local partners, and we showed them what Louisiana can do when we are aligned. And they said, ‘Well, this is where we want to be’,” Hand said.
Hand emphasized that the agreement ensures Meta pays enough to cover the costs it creates.
“We made sure that Meta’s deal would ensure that they would pay enough to cover the generation costs that they are contributing to, such that we mitigate the effect of Meta becoming the customer,” Hand said. “We mitigated the risks or the impacts that that would have on other customers.”
The settlement includes protective conditions imposed by staff and outside stakeholders to reduce risks of cost-shifting.
“The settlement … does authorize us to move forward with the generation and the transmission we have proposed, but very importantly, the staff insisted on a number of protective conditions … we believe the settlement … does mitigate the risk of cost shift to other customers, but also enables this project to go forward,” Hand said.
He noted that Entergy secured buy-in from groups that often oppose major utility investments.
“We weren’t satisfied with just getting the LPSC staff to sign on,” Hand said. “Those efforts led to additional protective conditions and signatories by Walmart, the Sierra Club, as well as the Southern Renewable Energy Association.”
Hand told commissioners that for ratepayers, the impact will be minimal.
“At the end of the day, we believe the net impact on a monthly bill for a customer … is going to be plus or minus $1 or so, up or down,” Hand said. “And to think about this transformational, once-in-a-generation investment opportunity, and the cost or the benefit of that is plus or minus $1 is just absolutely mind blowing.”
He also addressed concerns about Meta’s 15-year contract.
“There’s been some concerns about what happens after 15 years,” Hand said. “If Meta doesn’t renew the deal … we have a gift paid for by Meta, generators that we can use to replace the aging fleet that will exist in 2041. I would question the logic there that Meta is investing 10 plus billion dollars in Richland Parish to walk away after 15 years … But as a utility planner, we can’t assume that. We have to plan for the unexpected.”
Hand called the outcome a rare opportunity, saying that risks have been mitigated and that “this is as close as you can get in regulatory space to a no-regrets type of deal.”
The commission’s approval covers three new combined-cycle natural gas plants and a new 500-kilovolt transmission line. Entergy will also expand substations in Sterlington and Smalling, build new facilities at Car Gas Road and Tatum, and upgrade the Ray Braswell, Everitt, and Union Hill substations.
Meta will directly fund billions of dollars in additional interconnection projects, including $1.2 billion for substations and transmission upgrades. But ratepayers are responsible for at least $470 million tied to a new 60-mile transmission line connecting two substations.
