Louisiana data centres could push power costs on households

The Alliance for Affordable Energy and Sierra Club Delta Chapter have published a report on the cost of supplying electricity to large data centres in Louisiana, warning that households and existing businesses could bear a significant share.

Produced with research support from Empower, the report examines five large data centre projects under development in the state: Meta's proposed Hyperion site in Richland Parish, three Amazon facilities in north-west Louisiana, and Hut 8's AI infrastructure project in West Feliciana Parish.

It says two projects alone - Meta's Hyperion campus and Hut 8's planned site - could require as much as 7.2 gigawatts of electricity, roughly equal to the annual power use of 5.7 million homes.

The analysis focuses on how new power infrastructure would be financed as utilities and developers try to meet that demand. It identifies transmission lines, gas-fired power plants, pipelines and substations as major cost items tied to the projects.

A central concern is a Louisiana Public Service Commission rule adopted in December 2025. It allows data centre developers to pay 50% of the cost of new power infrastructure, with the rest potentially passed on to other electricity customers.

The report argues that, if projects proceed as planned, the structure could leave residential customers and existing businesses facing higher bills. It also says confidentiality agreements, private utility contracts and complex financing arrangements have limited public visibility into the projects' economics.

Meta financing

Meta's proposed Hyperion development receives particular attention. Researchers said the project is backed by a USD $27 billion private financing deal they described as the largest corporate bond issue in history, with much of the debt kept off Meta's public balance sheet.

The report says Meta's agreement with Entergy Louisiana would allow the company to exit its lease as early as 2033. In that case, it argues, ratepayers could be left covering the cost of three new gas-fired power plants, at least three transmission lines, associated gas pipelines and at least a dozen substations.

According to the report, the Louisiana Public Service Commission rejected a formal investigation into the financial risks linked to Meta's financing arrangement in February 2026 after consumer and environmental groups raised objections.

"This research shows that Meta can walk away from billions of dollars of investments in 2033, leaving Louisiana families to pay for this new infrastructure for decades," said Logan Burke, Executive Director, Alliance for Affordable Energy. "We deserve to know the real stakes of these projects."

Investor exposure

The report also traces the role of private capital in the state's data centre buildout, saying Blue Owl Capital is among the investment firms backing projects in Louisiana through private market transactions that receive limited public scrutiny.

Researchers said pension funds including the California State Teachers' Retirement System and the Pennsylvania State Employees' Retirement System are invested in Blue Owl Capital funds tied to the developments. The report argues that this links retirement savings to financing structures that are difficult for the public to assess.

It adds that the USD $27 billion bond associated with Meta's project received a rating from only one agency, S&P Global, and is held by large financial institutions including PIMCO, BlackRock and Prudential.

Power demand

The report places Louisiana's projects within a broader debate over the energy demands of AI-linked data centres in the US. Utilities in several states are weighing how to add new generation and grid infrastructure while deciding which customers should bear the cost.

Dennis Wamsted of the Institute for Energy Economics and Financial Analysis commented on the scale of the Meta development highlighted in the report. "The scale of power demand associated with the Meta project is staggering," said Dennis Wamsted, Energy Analyst, Institute for Energy Economics and Financial Analysis. "Unfortunately we are seeing rapid growth with little thought to what it means for consumers across the country. The reality is, utilities should be skeptical of projects that overlook ready-to-deploy, reliable, and affordable energy sources like solar, wind, and battery storage."

Beyond utility costs, the report questions Louisiana's tax treatment of data centre projects. It says Act 730 grants tax breaks lasting 20 to 30 years to projects that create as few as 50 jobs, without wage standards or automatic penalties if hiring promises are not met.

This has sharpened criticism from local campaigners, who say the public is being asked to support major infrastructure spending and tax concessions without enough information about the economic return. Residents have repeatedly sought details on the projects and their effects, the report says, but have encountered confidentiality claims and limited disclosure.

"Even as new details about these massive data centers come to light, our public officials refuse to acknowledge the real concerns and resistance from people on the ground," said Angelle Bradford Rosenberg, Chair, Sierra Club Delta Chapter. "Communities are just not given adequate time to address the financial risks, let alone the other knock-on impacts."

A resident in Caddo Parish said requests for information had gone unanswered. "We've asked for information again and again but have been turned away by our elected officials and appointed regulators," said Mary Stahl May, Caddo Parish Resident. "We deserve to know the details of these deals and to have a say in our own utilities and public costs."