Data centers and Entergy
Bringing big benefits to our communities
Bringing big benefits to our communities
Large industrial and technology companies are increasingly looking to the Gulf South states to build large, energy-intensive projects like data centers because of the unique advantages our region offers: strategic access to global markets through the Mississippi River and Gulf ports, a skilled workforce, and access to some of the best electrical infrastructure – and some of the lowest electricity rates – in the country. These customers also value the certainty and reliability of doing business in states that have a traditional regulated model for their public utilities.
The growth of new high-tech industry projects in our region brings unparalleled benefits to all of our customers that will improve the lives of our communities for generations to come. Most notably:
When hyperscale data centers locate in the Gulf South region, every customer connected to the grid benefits. The data center projects that we power will create direct benefits not just for our other customers, but for residents of these states for generations to come.
High-tech partners = Lower cost power
Electric grids operate on economies of scale, so when large customers establish service to power a major new project, they help spread the utility’s fixed costs to operate and maintain the grid over a wider customer base, driving down electricity prices for everyone. Data center customers are also paying to connect their facilities to our grid. There is no mark-up cost to customers on the service we provide, including any charges for purchasing fuel to power our plants.
Infrastructure improvements that benefit all customers
Hyperscale data center customers are paying their fair share for the infrastructure additions and upgrades needed to power their facilities. Where some of these upgrades were already needed – for example to replace aging power plants – now new, more efficient modern power plants will be built that ultimately could save current customers billions of dollars on their electricity bills over their lifetimes, and we’ll see improved grid reliability for everyone.
In addition, the presence of these data center customers on the grid will lower the cost per customer of future infrastructure improvements by spreading these fixed costs across a larger customer base, reducing the impact on all customer bills.
New jobs and economic opportunities for our states
The decisions of these global tech giants to establish their new operations in the Gulf South region cast a new and brighter economic development spotlight on our states, helping them become preferred destinations for a new wave of high-tech industries.
The presence of such large operations in the states we serve will also bring new resources to support and uplift our communities, now and for generations to come. For example, Meta’s Richland Parish Data Center project is creating $200 million in investments to improve infrastructure including roads and water systems to support both its facility and the surrounding community.
Projects of this scale also produce billions in economic impact dollars that go back into their local communities, including millions in new state and local tax revenue that will bolster investments in infrastructure and public services like roads, hospitals and schools. These investments also generate high-paying job opportunities, training for individuals so that they can qualify for those new positions, and workforce development.
For example, Amazon’s planned $10 billion data center investment is estimated to generate $30 billion toward the state of Mississippi’s gross domestic product.
Increased community investment and charitable giving
These companies are also committed to investing in the people and communities in which they are located – better workforce development and training resources, investments in STEM education, and charitable contributions that directly serve residents.
For example, as part of our service agreement, Meta has pledged to annually match $1 million in shareholder contributions to The Power to Care, our bill payment assistance program for vulnerable customers, and to provide funds to improve educational resources in the state of Louisiana through their Data Center Community Action Grant program.
We work with state leaders and economic development organizations to help recruit new projects from the world’s leading tech companies to our service areas. These companies are driving the future of digital innovation, shaping how billions of people across the globe live, work and connect online every day.
Now, they’re investing in our states, bringing unparalleled benefits that will improve the lives of residents for generations to come.
Entergy Arkansas
Google Data Center – Crittenden County, Arkansas
Entergy Louisiana
Meta Data Center – Richland Parish, Louisiana
Entergy Mississippi
Amazon Web Services Data Center – Madison County, Mississippi
AVAIO Digital Partners Data Center – Rankin County, Mississippi
Any time economic developments of this scale are announced, there are bound to be questions about the impact on residents, and information being shared by outside parties is not always accurate. Here are a few of the most common myths about data centers that are circulating – busted.
A data center being built in my state and powered by Entergy will make my electricity bills go up.
THE TRUTH
Electric grids operate on economies of scale, so when large customers establish service to a major new project, they help spread the utility’s fixed costs to operate and maintain the grid over a wider customer base, driving down electricity prices for everyone. Data center customers are also paying the cost to connect their facilities to our grid. There is no mark-up cost to customers on the service we provide, including any charges for purchasing fuel to power our plants.
Some of the infrastructure improvements that data center customers pay for produce additional benefits for existing customers, such as replacing old generation units slated to retire with new modern power plants. Replacing units sooner with new, more efficient modern power plants could save existing current customers billions of dollars on future bills.
While data centers may use a higher level of electricity in their day-to-day operations than most, they pay directly for the power they use. Some data center customers even prepay some of their cost of service as part of the service agreement with Entergy, generating even more savings for other customers.
A data center being built in my state and powered by Entergy will negatively impact grid reliability, increasing power outages and making my electricity service worse.
THE TRUTH
The presence of data centers on our grid will not impact reliability or service for other customers. Data centers need a large amount of electricity to operate, but before agreeing to power a new facility, we work extensively with the new data center customer to ensure that enough new power generation capacity and appropriate transmission upgrades will be added to the system to reliably supply additional demand on the grid while maintaining reliable service to our existing customers.
The fact that Entergy is a fully regulated public utility means that all major changes to our system and investments in our grid must comply with strict regulations. While some of the terms of these new data center customers’ service agreements are competitively sensitive to the customer and not publicly disclosed, utility regulators are able to review and evaluate all of these terms. This extensive regulation is designed to ensure transparency and customer protections, for example, maintaining rates below the national average and ensuring continued reliable service.
The infrastructure improvements being made and additional generation resources being added to the grid to power these facilities will also improve reliability for all customers. And the additional revenue from sales of electricity to these new customers will provide us with more resources and financial flexibility to invest in the reliability of our electric system, such as hardening infrastructure like poles and lines to withstand more severe weather and adding new technological innovations like self-healing networks to the grid that benefit all customers.
A data center customer could change their mind and decide to abandon their project in my state after Entergy has spent millions of dollars to build new generation capacity and infrastructure for them, leaving residents on the hook for the cost without delivering any of the benefits.
THE TRUTH
Each Electric Service Agreement between one of our operating companies and an industrial customer like a data center is unique, and the terms are competitively sensitive to the customer and therefore confidential. However, in any service agreement negotiation, we ensure that contract provisions such as prepayment requirements, multi-year contract terms, credit and collateral requirements, and early termination penalties protect existing Entergy customers from these types of risks. Regulators oversee these arrangements to ensure that the interests of all customers are protected.
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