Plans to power Meta's $10 billion AI data center in northeast Louisiana reached a key stage on Tuesday with the opening of a hearing aimed at weighing Entergy's proposal to build three new electricity plants in connection with the facility.
The hearing before an administrative judge in Baton Rouge began a day after Meta CEO Mark Zuckerberg weighed in on what would be the company's largest data center yet, talking of plans to scale it up even further in the future, potentially giving it a footprint rivaling the size of Manhattan.
The project has been lauded by state officials as a major economic development win for an impoverished area of Louisiana. Consumer and environmental groups have however raised deep concerns over the facility's massive energy needs and whether some of the costs of powering it would eventually fall to average ratepayers.
While this week's hearing may result in recommendations from Judge Melanie Verzwyvelt, the state's Public Service Commission can eventually vote as it chooses, and it is widely expected to approve the plans. Entergy broke ground on a substation last month that did not require regulatory approval.
Environmental nonprofits and a coalition of petrochemical companies questioned Entergy's proposal to build the gas-powered plants on Tuesday. The unlikely coalition argues that the utility and tech giant will reap the benefits, while residents and large industrial customers could take on risks.
"Entergy should not be allowed to use its monopoly structure to unreasonably impose financial risks on its existing captive ratepayers to serve the new data center load, while it reaps the return-on-equity benefits to be gained from the unprecedented billions of new infrastructure spending," the Louisiana Energy Users Group, a coalition of companies including ExxonMobil and Dow Chemical, wrote in their brief before the hearing.
LEUG has been at odds with Entergy in the past over its members' attempts to buy their own power without going through the utility. Consumer advocacy and environmental groups are meanwhile raising concerns over the planned fossil fuel-powered plants and whether the new demand will further strain the grid.
Entergy maintains that other ratepayers will not be on the hook for most of Meta's energy needs, as the tech company is paying for substantial amounts of the generation, and stresses the data center is a win for economic development.
The utility 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."
But the life of one such plant can exceed 30 years, which is a sticking point for the opposing groups.
Zuckerberg, who posted his comments on Threads, said the company intended to scale up the facility to a five-gigawatt data center over several years, the size of which would rival Manhattan and consume the amount of power of New Orleans six times over in a given year. Ashley Settle, a spokesperson for Meta, confirmed that the project, named "Hyperion," refers to the Louisiana data center.
The already-historic plan for the Richland Parish facility could consume less than half of the figure Zuckerberg boasted. In February, Stacey Yip, another Meta spokesperson, confirmed that the Louisiana site would have around 2GW of server capacity, but need additional energy for cooling and office space.
"I know [Meta has] been investigating the ability to buy more land and to build more power," Louisiana Economic Development Secretary Susan Bourgeois said. "Since the beginning, there was an ongoing conversation about the potential for growth there and that is one thing that was so attractive about that state site – the growth potential."
The advocacy groups 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. Entergy rejects extending the contract, Laura Beauchamp, vice president of business strategy and operations at the utility, reiterated during the hearing.
The tech company is not paying for fuel costs of the gas plants or a new $550 million transmission line, according to public filings.
Meta 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.
Beauchamp said Tuesday that she did not know if the new hires would be locally based. The confidential agreement the utility reached with the tech company "is about the production of service of electricity, it is not tied to the number of jobs," she said.
Some of the parties involved in the electricity proposal – including the staff of the Public Service Commission and the Sierra Club – came to an agreement last week, shortening the length of the hearing from two weeks to two days. The role of the commission staff is to help fill informational gaps to help the elected commissioners reach their decision.
Joshua Smith, a staff attorney at the Sierra Club, said that his group's settlement last week was "not an ideal outcome," but that he's cautiously optimistic over Meta's agreement to procure additional solar to offset some of the data center's gas-related pollution.
"This was a difficult one because we've had two Louisiana commissioners vocally support the project," Smith said. "The governor has been supportive. So once commission staff decided to settle as well, it in my view became extremely unlikely that you have an outcome that defeated any one or all of the gas generators."