Meta's Louisiana data center could provoke outages, advocates say. Entergy says safeguards in place.

Entergy's plan to power Meta’s massive data center in northeast Louisiana is being portrayed in starkly different terms in new filings, with advocacy groups warning of the potential for major outages and company officials maintaining that safeguards will be in place to prevent them.

The utility is asking state regulators to build three new gas-fired power plants at a cost of $3.2 billion plus other transmission infrastructure for an airport-sized facility in Richland Parish. The data center would help Meta – the parent company of Facebook, Instagram and Whatsapp – expand its artificial intelligence technology and compete with rival companies like Google and OpenAI.

Powering the data center would draw more than twice the maximum capacity of New Orleans’ peak summer demand.

Consumer advocacy and environmental nonprofits Alliance for Affordable Energy and the Union for Concerned Scientists urged the Louisiana Public Service Commission to deny Entergy’s request, unless the utility adds more safeguards.

“Investment in Louisiana should benefit local communities where projects are being planned and not burden ratepayers across the state who stand to benefit nothing,” said Logan Burke, the executive director of the Alliance for Affordable Energy. “Entergy has provided no such assurances.”

Entergy disputes these arguments and stresses that the project will benefit all customers, not just Meta.

“This was a very complicated contract and unlike anything anybody’s negotiated in the industry," said Laura Beauchamp, vice president of business operations and strategy at Entergy. “There were gives and takes on both sides, but the overarching goal for us was to make sure our customers had significant benefits and that is the ultimate deal we struck.”

The opposing groups filed testimony in April and Entergy filed rebuttal arguments last week. At this point in the process, the parties typically negotiate their stances with commission staff or, in rare cases, enter a contested hearing. The utility regulators are expected to make a ruling on the proposal later this year.

Major details of the case are hidden from public view, as all parties involved signed nondisclosure agreements. The full capital investment of the projects, the data center's most recent expected power demands, and details of the agreement with Meta are all redacted from publicly available documents.

State officials have lauded Meta’s $10 billion project as a win for economic development in one of the poorest regions of the state. The company announced in December its plan to build the industrial site on agricultural land the size of around 70 football fields. The project is expected to support 300-500 permanent jobs and 5,000 construction workers at peak. It is unclear whether these jobs will go to local residents.

‘Major disruptions’

Because the data center needs so much power, sudden changes in the amount the facility uses could destabilize the grid, according to a technical service consultant supporting the nonprofits. This could be especially troubling for Louisianans, who pay higher-than-average electricity bills and depend on one of the least reliable grids in the country, according to a January report from the Louisiana Legislative Auditor’s Office.

Over Memorial Day weekend, over 100,000 people in the New Orleans area lost power because of forced outages triggered by a constellation of problems with the region’s electric grid. 

Nicholas Miller, a technical consultant supporting the nonprofits, argues that Entergy’s proposal may understate the amount of transmission needed and that the utility has not adequately evaluated potential risks.

“If these load fluctuation problems are not adequately addressed, businesses and residents in North Louisiana could face major disruptions to their electric service,” Miller said in his testimony.

As the amount of power used by data centers has skyrocketed in recent years, grid operators in other states are scrambling to avoid data center-induced mass blackouts. 

Entergy says the utility has completed extensive modeling to address these concerns. Daniel Kline, an Entergy employee, said in the public filings that the utility proposal “fully accounts for system risks based on the best information at this time.” Beauchamp noted that the new resources will be studied by the regional grid operator.

'Can't dictate to a customer'

Entergy also maintains that regular customers will not pay for most of Meta’s energy needs. The company says that Meta is paying for the full annual revenue of the natural gas-fired plants for 15 years and that the tech company "will contribute a large percentage of the costs that would otherwise be borne by all of [Entergy's] customers."

The life of one such plant can exceed 30 years, and the advocacy groups question what will happen if Meta decides to leave after 15. The nonprofits want Meta’s contract with Entergy extended to 25 years to more closely align with the duration of a gas plant. The utility, however, says that even if Meta leaves after the 15-year contract, the plants will be needed as others are retired.

Beauchamp said that it would not be possible for the 15-year deal to be renegotiated to 25 years.

“We can’t dictate to a customer how they do business,” Beauchamp said.

The advocacy groups are concerned about other potential cost increases for ratepayers, such as those related to a $550 million new transmission line and fuel costs for the plants. Beauchamp said that the new infrastructure is expected to be paid for by Meta.