Late last year, Louisiana utility regulators quietly approved a new approach for handling electricity infrastructure proposals for powering large customers—a change that could force ratepayers in the state to pay more than half of the costs of powering a given AI data center.
The Louisiana Public Service Commission’s (LPSC) new approach—introduced by Commissioner Coussan, and supported by all other commissioners except Commissioner Lewis—creates a fast track for utility companies seeking to build power plants and other infrastructure in response to a large, energy-intensive customer’s request to connect to the grid. This type of large customer is, by far, most likely to be an AI data center these days.
Substantively, this fight is about blocking the completely avoidable risk of energy-bill spikes for Louisianans, simply to cater to the rushed planning of electricity infrastructure to power data centers—energy guzzling behemoths, which can put city-sized demands on the power grid. There was effectively no way to provide input on the policy without physically showed up to the vote, which a total of three people did. Here’s a look into how this initiative, dubbed the “Lightning Amendment,” became an official, unwritten Louisiana utility policy, with essentially zero public input.
The process, or lack thereof:
Aside from the transcript and minutes of the monthly meeting where the vote took place, this new policy will not be written down anywhere in its final form (for example, through a written order). Transcripts and minutes seem to stay on the LPSC’s website for just two years—but it’s easy to imagine a future in which there are no traces or paper trails for this massive hand-out to tech and utility companies, at consumers’ expense. (So, for the sake of future transparency, we’ve gone ahead and archived the minutes and transcript.)
Let’s talk about the name. The “Amendment” part of “Lightning Amendment” is nominally a change to the Commission’s existing “request for proposals” (RFP) rule, in that it waives those requirements (more on this further down). However, even the name is a farce, as this does not actually appear to be a real “amendment” because the rule in question will not actually be changed in the official, permanent record. The docket where this rule lives shows no such activity.
I’ve spent more time than I’d like tracking regulatory dockets across the country, so trust me when I say this: this is not at all how regulators typically enact new policies, which are generally traceable and permanent so that anyone can find the standards that apply. In the absence of full transparency from the LPSC, here’s our effort to add some permanence and clarity to this new regulatory approach.
The substance: who qualifies for this fast-track review?
So, what criteria would a utility company—say, one seeking to serve a new AI data center—have to meet in order to go through this fast-track regulatory review process— say, for a new gas power plant?
Well, the two main substantive requirements are first, that the utility must have an electricity supply agreement with the data center with a minimum 15-year term, and second, that the data center must commit to covering at least half of the cost of that new power plant.
Yes, just half.
That begs the question: who would pay the other half? In all likelihood, other Louisiana ratepayers, who may not benefit at all from the data center. And the kicker? It could end up being even more than half of the cost funded by everyday Louisianans’ utility bills—more on that below. Keep in mind that these data centers are being built across the country by the likes of Meta Platforms, Facebook’s parent company, and Microsoft, which are some of the wealthiest companies in the world and are entirely capable of paying for 100% of their own power needs.
Ratepayers could fund as much as 75% of capital costs
Electricity infrastructure typically lasts for decades and is paid for by ratepayers until it fully “depreciates.” A depreciation schedule is like a mortgage schedule for paying off the loan taken out for buying a house (there are distinctions between the two, but for the purposes of this piece, we’ll keep it simple).
These terms set up the first trap for ratepayers. A proposed data-center-serving gas power plant, for example, doesn’t fully depreciate over 15 years. Typically this depreciation takes place over a much longer period, around 30 years or more. (Note: a 30-year “depreciable life” would align with Entergy Louisiana’s three gas plants approved last year for Meta Platforms’ data center in Richland Parish.)
In that scenario, we’d have a situation where a utility company could go through this new fast-track process while only securing 25% of the revenue needed to pay for the capital costs of the gas plant: half of the costs for half the depreciable life. Because there is no requirement in the Lightning Amendment for a utility company’s shareholders to share in the costs, ratepayers would be on the hook for the remaining 75%.
In that situation, the LPSC could hold these actors accountable, and protect ratepayers, by “disallowing” costs from being passed to ratepayers further down the line if the utility acted “imprudently.” A finding of such imprudence would require the utility’s shareholders pay up, instead of ratepayers. However, absent any blatant and visible mismanagement, the Commission is unlikely to conclude the utility acted imprudently after they’ve strongly signaled with this new policy that they’re okay with ratepayers subsidizing Big Tech’s data center development.
And though the language in the minutes is vague, this arrangement appears to be is just for the capital costs, meaning the physical infrastructure being constructed. The requirement to cover half of the associated costs does not seem to include operational costs, such as fuel purchases, which Entergy’s customers are also slated to subsidize after the approval of its gas plant project for the Meta data center.
The power costs may also be inflated
Here comes the second trap for ratepayers: eschewing the most basic cost-savings measures. In an effort to speed through these electricity project reviews, the Lightning Amendment waives the Commission’s requirements for utilities to issue a request for proposals (RFP) as long as the utility’s project meets the criteria discussed above.
In theory, the RFP rule requires utility companies to test the market and solicit bids from third-party power providers, such as renewables and storage developers, to ensure that electricity demand is being met at the lowest possible cost. By waiving this rule, utilities do not have to meet the demand of the large customer like a data center at the lowest cost. Instead, they are likely to seek to build their own generating capacity, because it’s often more profitable to do so. This is what happened in the Entergy/Meta case last year: Entergy got a waiver from the RFP rule and elected to build its own gas plants and transmission infrastructure. The utility company now stands to make an estimated $178 million in new annual shareholder profits.
With this new policy, the LSPC is not only setting the stage for half of the costs of powering data centers to be passed to other customers, but also making it quite likely that those overall costs will be needlessly inflated by doing away with the most basic RFP cost savings requirements. It’s hard to envision a bigger gift to Louisiana utility shareholders, at the expense of energy affordability for millions of people.
Planning entire cities’ worth of demand in eight months
From there, the remaining obstacles are small. There are some other miscellaneous requirements, like a letter from the Louisiana Economic Development Secretary “confirming the customer’s interest and the importance of power availability” within five years of an initial application. Once these criteria are met, the Commission is aiming to get the utility’s project approved in just eight months.
In Richland Parish, the Meta data center’s peak load is planned to be twice that of the entire city of New Orleans, and future data centers could also potentially consume entire cities’ worth of demand. Entergy’s gas plant project for the Meta data center was already rushed, originally planned for a 12-month regulatory review process, until it was suddenly shortened to just 10 months. Nearly half a year after the LPSC’s August 2025 approval, Entergy still hasn’t adequately demonstrated that it can power Meta’s massive data center while keeping the grid reliable for other customers.
The attempt to shoehorn this complex regulatory review process—which involves hearings, stakeholder testimony, settlement negotiations, and so on—into a period of just eight months sets the state up for a wide array of heightened risks, namely power outages. Across the country, the rapid growth in data centers is keeping grid-reliability authorities up at night, and Louisianans already experience far more power outages than average. Both transmission grid operators for the state had to implement rolling blackouts last year in two separate events. And though the state’s main transmission grid just managed to stay reliable during the recent Winter Storm Fern, distribution grid disruptions knocked out power for more than 100,000 customers, several of whom tragically lost their lives due to the outage.
The LPSC review process should be aimed at determining whether a given project proposal is in the public interest—something that is going to be much harder to accomplish with a straight face when the “lightning” approach risks even more power outages. By doing away with requirements for assessing cheaper and cleaner resource options, the “Lightning Amendment” is also likely to result in higher costs for ratepayers and more harmful pollution.
Figuring out a better way forward
In the same meeting where Commissioner Coussan’s Lightning Amendment was passed, Commissioner Lewis introduced a very different type of proposal on the same topic. Commissioner Lewis wanted to open a rulemaking docket on handling proposed additions of large loads, such as data centers, which would allow a wide array of stakeholders to provide input on how the LPSC should handle this new challenge of data center growth. However, the vote was deferred in December, and deferred again at the Commission meeting in January.
This proposal is much more reasonable than the Lightning Amendment, and can lead to a framework where ratepayers are protected from the costs and risks of Big Tech’s data center development. If you live in Louisiana—outside of New Orleans, since the New Orleans City Council regulates utility rates there—you can call or email your Public Service Commissioner and urge them to implement data center policy that puts the interests of Louisiana communities above those of Big Tech and utility companies.