(The Center Square) – The ownership and financing of Meta’s giant data center in northeast Louisiana needs more scrutiny from state regulators, according to environmental advocates who say the structure increases the risk for utility ratepayers.
Environmental law nonprofit Earthjustice asked the Louisiana Public Service Commission on Wednesday to investigate whether the newly disclosed structure of the campus under construction in Richland Parish weakens protections promised to customers of Entergy, the New Orleans-based utility building the infrastructure needed to power the massive project.
In October, Meta revealed that asset management firm Blue Owl agreed to finance much of the data center in exchange for an 80% ownership stake, with Meta retaining 20%. Under the agreement, Blue Owl would borrow roughly $27.3 billion through bonds to finance the project and Meta would lease the data center in four-year terms.
But that structure could allow Meta to exit after relatively short intervals, Earthjustice argues, increasing the risk that utility customers could end up paying for the data center’s power plants and transmission even if the project’s load declines or departs.
EarthJustice is asking the commission to examine whether the structure undermines ratepayer safeguards it relied on when it approved Entergy’s application for the project, including termination payments and other protections intended to shield other customers from stranded costs.
Entergy Louisiana, in a statement provided Wednesday, said Meta’s obligations under its electric service agreement are “supported and backstopped by robust credit protections,” including a guarantee from Meta that remains in effect regardless of changes to the project’s ownership or financing. The financing arrangements of the project are outside the utility’s and the commission’s purview, Entergy said.
“In plain terms, Meta remains obligated to satisfy Laidley’s obligations to Entergy Louisiana regardless of how it may change its ownership structure or finance its business,” the company said, referring to a Meta subsidiary developing the data center.
Entergy said suggestions that it misled regulators are “utterly without merit,” and that their agreement with Meta represents a “significant win” for Entergy ratepayers. The utility said the agreement secures $650 million in customer savings over its term.
