It’s not as important that another win for Republican Gov. Jeff Landry tamped down discord among some over data center spillover costs as it is that it deflated the rearguard action conducted by climate alarmists.
Already having set the stage with his recent executive order that said costs passed on to power and water consumers as a result of data center creation and expansion had to be matched by benefits conveyed to consumers in other ways, Landry received an assist from his ally Pres. Donald Trump when the latter’s Ratepayer Protection Pledge recently drew the signatures of heavy hitters in the data center universe. Governors also were invited to sign off, and Landry assuredly did, going a bit further than his executive order.
Essentially, the pledge says entities involved will not pass along exclusive data center added costs to the general public. All major Louisiana power utilities have signed it, as have a number of entities building, overseeing, and operating data centers in the state, or planning to do so. A framework to restrict this already exists with the Public Service Commission, although a dissident Democrat on it claims this should occur more specifically.
Deploying this framework seems inevitable with the additional public pressure that Landry and Trump have placed on the issue. Concerns had arisen about the two biggest power providers, Entergy Louisiana and Southwestern Electric Power Company, over whether they would try to offload solely data center expenses onto ratepayers. A consultant has tagged a generator-purchase filing by Entergy before the PSC, tied to the Hyperion project near Monroe, as containing costs that could be passed along, and a similar scenario could occur as SWEPCO is snapping up generation sites or converting others to gas because its parent company, American Electric Power, is expanding data-center service.
That seems off the table with the pledges signed by both companies involved, which, in doing so, know they have put themselves under a microscope and would face punishment should any deviation occur. That should satisfy consumers, who will expect the PSC to veto any actions contrary to that. (The New Orleans City Council, which regulates power provider Entergy New Orleans, is poised to restrict the size of data centers, ensuring minimal to no such activity within Orleans Parish.)
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Yet this isn’t enough for the climate alarmism crowd, such as the leftist special interest group the Alliance for Affordable Energy. Its top officials keep calling the latest evidence of consumer protection meaningless or even disingenuous to Louisianans, trying to keep their troops rallied against approval of data-center power provision on anything but their terms.
But their terms are infused heavily with climate alarmism. They don’t so much object to costs passing through to consumers as they do to the buildout concentrating heavily on increasing fossil fuel – mostly gas – generation capacity that violates their ideological imperative. Because of this sudden demand increase, combined-gas cycle turbine building costs have hit a 15-year high – except that when dispatchability is factored in, these costs still average below those of the cheapest renewable source, especially when subsidies are removed, so to save ratepayers the most it makes sense that providers have headed in this direction. These activists know rapid renewable source generation can’t hope to keep up with demand at a price lower than gas, so what the market won’t do for them, they want government to impose.
So, understand that opposition to data centers from these folks on the basis that consumer costs will rise really is an attempt to manufacture fellow travelers and create political pressure to curtail data centers as a means of burning less fossil fuel. Don’t be fooled by these Luddites who leverage the myth of catastrophic anthropogenic global warming to empower government at the expense of people.
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