Louisiana to fast-track new power plants serving data centers

(The Center Square) − Louisiana utility regulators on Wednesday agreed to fast-track the process for building new electricity generation to handle the power needs of major industrial projects, including data centers moving into the state at a rapid pace.The directive, approved 4-1 by the state Public Service Commission, is designed to align with Gov. Jeff Landry’s “Louisiana Lightning Speed Initiative,” which calls on state agencies to speed permitting and regulatory timelines for large employers.Companies will no longer be required to meet some criteria for quick permit approval, including signing a minimum 10-year electric-service agreement with a new or expanding customer, obtaining confirmation from the state that the project is a priority and pledging the revenue to cover at least half of their project’s fixed costs.The directive also instructs the commission’s staff to review and process filings on an accelerated timeline, with the goal of a vote within eight months. Minutes after voting, the commission deferred a separate directive from Commissioner Davante Lewis to develop a framework for large-load customers, examining issues like cost-sharing, reliability and consumer protections. Lewis said Louisiana needs to plan carefully for energy-intensive users “to ensure the public interest is considered in a transparent and deliberative process.” His concerns are shared by groups including the Pelican Institute for Public Policy, who wrote a letter warning that “some versions of the Lightning Initiative risk bypassing competitive procurement, accelerating utility-owned generation and transmission projects, and shifting billions of dollars in long-term capital costs directly onto ratepayers – all with limited transparency or market discipline.”The electricity needed to power large industrial projects moving into Louisiana, including Meta’s $10 billion data center in northeast Louisiana and Hyundai’s $5.8 billion steel mill near Baton Rouge, is expected to cost billions of dollars and require utilities like Entergy to make massive upgrades. In August, Louisiana regulators approved a slew of new generation for Meta’s data center. Entergy expects to spend at least $498 million on infrastructure for Hyundai’s steel plant. On Wednesday, the state announced a $10 billion data center will be developed in southeast Louisiana for the AI company Anthropic. On Thursday, the Shreveport City Council is set to vote on another data center. Commissioners defended the looser restrictions as a way to keep Louisiana competitive for big employers that need a lot of electricity quickly, without giving up the commission’s power to protect customers.“Louisiana is indeed well-positioned to maintain and expand our advantage, but we must continue to modernize our regulatory tools and processes,” Commissioner Jean-Paul Coussan said in the directive’s text. “We now have a unique opportunity to create a regulatory pathway that enables Louisiana to be a consistent leader in attracting major employers.”Randy Young, an attorney representing the Louisiana Energy Users Group, a trade association of industrial electricity consumers, advocated for a compromise.“It is a fantastic, wonderful thing that we have all this opportunity before Louisiana right now,” he said. “But we’re ratepayers, so it’s extremely important to think about the existing ratepayers and bringing some balance.”Young urged the commission to keep safeguards from the market-based mechanism in place to ensure “reliable power at the lowest reasonable cost.”“This focus is on lightning things – but are there some lightning protections we can put in place for the existing ratepayers?” he said.Commissioner Eric Skrmetta said regulators still have broad authority over utilities and can step in if projects prove unnecessary or too costly.He said the commission can push utilities to make better use of existing or already-approved generation instead of continuing to add new plants.