HOLLY RIDGE, La. (AP) – In a remote part of Louisiana, Meta is constructing one of the largest data centers in the world, a$10 billion behemothas large as 70 football fields, which will use more energy in a single day than the whole city of New Orleans does during the hottest part of summer.
Although the massive project is hard to overlook in Richland Parish, a rural area with 20,000 people, not all aspects are apparent, such as how much the social media company will contribute to the over $3 billion in new power infrastructure required to operate the facility.
Watchdogs have cautioned that in the rush to profit from theAI-driven data center boom, some states are permitting large technology companies to manage costly infrastructure initiatives with minimal supervision.
Lawmakers in Mississippi permitted Amazon to skip regulatory review for energy infrastructure to support two data centers it is investing in.$10 billionto construct. In Indiana, a utility is planning a subsidiary focused on data centers that functions outside typical state regulations. Although Louisiana claims to have implemented consumer protections, it is behind other states in its attempts to shield regular electricity users from costs associated with data centers.
Mandy DeRoche, a lawyer representing the environmental organization Earthjustice, states that there is reduced openness because of non-disclosure agreements and quick approvals.
Entergy receives official permission for a large-scale Meta energy initiative
“You can’t track the facts, you can’t consider the advantages or the adverse effects that might affect the service area or the community,” DeRoche stated.
Secret agreements for public energy distribution
Working under a contract with Meta, the power company Entergy has committed to constructing three gas-fired power plants capable of generating 2,262 megawatts — which is equal to one-fifth of Entergy’s existing power output in Louisiana. The Public Service Commission gave approval to Meta’s infrastructure plan in August, following Entergy’s promise to enhance measures that would avoid a significant increase in home electricity rates.
Nevertheless, confidentiality agreements hide the amount that Meta will pay.
Consumer rights advocates attempted and did not succeed in forcing Meta to give sworn statements, undergo discovery, and be questioned under cross-examination throughout a regulatory investigation. Regulators examined Meta’s agreement with Entergy, yet were prevented from disclosing specifics.
Meta did not respond to AP’s inquiries regarding transparency, while Louisiana’s economic development agency and Entergy stated that non-disclosure agreements are typical for safeguarding confidential business information.
Davante Lewis, the sole member among the five public service commissioners who opposed the plan, stated he remains uncertain about the amount of electricity the facility will consume, whether gas-fired power plants are the most cost-effective choice, and if it will generate the anticipated 500 jobs.
“There are specific details we should be aware of and require knowledge about but currently lack,” Lewis stated.
Furthermore, Meta is exempt from paying sales tax due to a 2024 Louisiana law that the state admits could result in “tens of millions of dollars or more annually.”in lost revenue.
Meta has committed to covering approximately half of the construction expenses for the power plants over a 15-year period, including any additional costs that may arise, according to Logan Burke, the executive director of the Alliance for Affordable Energy, a consumer advocacy organization.
Public Service Commission member Jean-Paul Coussan states that the effect on consumers will be “minimal.”
However, watchdog groups caution that Meta might exit or fail to renew its agreement, resulting in the public bearing the cost of the power plants for the remainder of their 30-year lifespan, with all grid users anticipated to contribute to the $550 million transmission line that serves Meta’s facility.
Ari Peskoe, head of Harvard University’s Electricity Law Initiative, stated that technology firms should be obligated to cover “every single cent” so that the public does not end up bearing the costs.
How is this handled in other states?
Elsewhere, technology companies are not being granted similar flexibility. More than adozen stateshave implemented measures to shield homes and business ratepayers from bearing the burden of increasing electricity expenses linked to power-intensive data centers.
The utilities commission in Pennsylvania is creating a sample rate plan to protect customers from increasing expenses linked to data centers. Officials in New Jersey are examining if data centers lead to “unreasonable” cost hikes for other consumers. Oregon enacted a law this year requiring utility regulators to create new, and likely higher, electricity rates for data centers.
And in June, Texas introduced what it refers to as a‘kill switch’ lawenabling grid operators to request data centers to lower their power consumptionduring emergencies.
Locals have mixed feelings
Some residents of Richland Parish worry about a cycle of rapid growth followed by decline once the construction phase is complete. Meanwhile, others anticipate an increase in funding for schools and healthcare services. Meta has announced its intention to invest in 1,500 megawatts of renewable energy in Louisiana and allocate $200 million towards water and road infrastructure within Richland Parish.
“We aren’t from a wealthy area, and the funds are greatly needed,” said Trae Banks, who operates a drywall company that has tripled in size since Meta’s arrival.
In the nearby town of Delhi, Mayor Jesse Washington is convinced that the data center will ultimately benefit his community of 2,600 residents.
However, currently, construction-related traffic is causing frustration among residents, while property prices are rising rapidly as developers strive to accommodate thousands of construction workers. Over a dozen low-income families were removed from a trailer park, as the owners are constructing housing for new Meta employees, according to Washington.
We have many worried individuals — they have caused difficulties for many people in specific regions here,” the mayor stated. “I simply want to see people from Delhi gain from this.
