Two environmental and consumer protection groups are challenging Entergy’s plan to power a massive artificial intelligence data center for Meta, Facebook’s parent company, in northeast Louisiana.
The Alliance for Affordable Energy and the Union of Concerned Scientists have filed a motion asking the state’s utility regulators to deny Entergy’s request to build three gas power plants at a cost of over $3 billion until it follows standard procedure. If the regulators side with the advocacy groups, Entergy would have to scrap the proposal in its current form and resubmit it after proving the gas plants are the best option available.
Entergy did not sufficiently show that the plants are the most cost-effective generation options that serve the public interest, the groups allege. They say the state’s largest utility did not meet requirements to be exempt from the Louisiana Public Service Commission’s standard process, where the utility must go to the market to assess the various options that would meet electricity demands.
“This is a real problem from our perspective for ratepayers because we effectively have to take it on faith that Entergy has found the least cost option that will serve their customers,” said Logan Burke, the executive director for the Alliance for Affordable Energy.
Entergy argues that the benefits the data center would bring in the form of jobs and economic development, the significant outside funding from the tech giant for the power plants and the need to speed the process to secure Meta’s investment is enough to forego the formal process.
Entergy declined to comment on the motion itself, but a spokesperson highlighted the benefits the data center would bring to a region in need of new economic prospects. The project is expected to create 300 to 500 jobs.
“It represents a major investment for the state, creating new job opportunities both during construction and in long-term operations,” Brandon Scardigli, the company representative, said. “Entergy Louisiana will play a key role in providing reliable and sustainable energy to support Meta’s operations, reinforcing our commitment to renewable energy and economic growth.”
Meta did not immediately respond to requests for comment.
In December, Meta announced its $10 billion plan to build its largest data center yet in Richland Parish, in a rural area east of Monroe. The advance of AI is causing demand for these airport-sized computer warehouse facilities to skyrocket, though they can also strain local grids.
The new electricity generation could account for up to 30% of Entergy’s power in Louisiana, state officials have said, though the utility stresses the plants will be set up for clean energy production when feasible in the future. The Richland Parish complex is planned at 4 million square feet, the size of around 70 football fields.
Entergy is asking the commission to approve the construction of the three new gas power plants, two of which would be located near the facility and a third elsewhere in the state. The utility wants the proposal approved by October, around a year after it submitted the application to the regulators.
An administrative law judge will handle the motion and offer a recommendation to the commission. Whoever loses on the motion has the right to appeal, members of the environmental groups noted.
Typically, a company requesting new power generation from state regulators would undergo a request for proposal, where it lays out all types of available sources of generation, from conventional to battery storage. These rules were updated last year, with the goal of including “a broad spectrum of supply-side options to provide the commission, stakeholders, and customers with information and participation from multiple generation types.” There are exceptions, including for smaller contracts or the purchasing of emergency power. The utility can also propose an alternative if it can prove that the regular process would not be in the public interest.
Entergy is seeking a broad waiver to the requirements, but the advocacy groups, represented by the environmental law nonprofit Earthjustice, argue it does not meet the standard for these exceptions. They want the commission to require Entergy to submit a proposal request and deny the utility’s application in the interim.
The advocacy groups said Entergy should be able to expedite the proposal request process and still meet Meta’s timeline. Entergy’s application stresses the need for a quickened process.
“The commission’s competitive RFP process is likely to bring cleaner, less expensive proposals for meeting the data center’s energy needs,” said Paul Arbaje, an analyst for the Union of Concerned Scientists’ climate and energy program.
Commissioner Davante Lewis said it was too early to comment on the motion, but that the filing raises questions that the commission should look into.
“Having a review process is important to ensure we are building generation that is needed that is also the most cost-efficient,” Lewis said.
Eric Skrmetta, another commissioner, similarly declined to comment on the motion specifically, but said he believes the concerns over fast tracking the process or massive power needs to be unfounded.
“The industrial customer being the guarantor of the construction is a game changer,” Skrmetta said, referring to Meta’s financial commitments to the new power plants. “We are protecting the folks that need to be protected and at the same time creating the energy for industrial expansion.”
According to Entergy’s redacted application to the regulators, the tech company will pay the full annual revenue for the planned generators over the course of a 15year term, translating to “a large percentage of the costs that would otherwise be borne by all of (Entergy Louisiana’s) customers.”
The advocacy groups, however, argue that ratepayers could be at risk in the future.
“The expert witnesses are examining the complicated filing now to determine the impact on ratepayers, but there is every reason to believe the project will impact ratepayers even if Meta does not terminate early and resigns a new agreement when the agreement’s first term ends,” Arbaje said.
Reprinted from the Baton Rouge Advocate. Staff writer David Mitchell contributed reporting.
