A proposed data center in Louisiana could consume as much energy as six New Orleans’ worth of electricity. With such immense energy consumption, the question arises: who will bear the cost?
Though Louisiana currently lacks an abundance of data centers, the rise of energy-consuming artificial intelligence is set to reshape this reality. Over the next decade, the state’s electrical grid could see demands comparable to multiple urban centers.
According to new research by the Union of Concerned Scientists, this data center growth could result in billions of additional electricity system costs for Louisianans over the next 15 years. Under existing policies, these AI facilities are likely to be powered mainly by fossil fuels, potentially leading to billions in public health expenses and tens of billions in global climate damages.
Tackling this substantial yet uncertain growth requires meticulous oversight from regulators and policymakers to safeguard public interests. In various regions, data centers have caused expensive and hazardous power outages and increased utility bills amid rising energy costs. Depending on their power sources, data centers can significantly impact public health and global climate. Unfortunately, Louisiana’s current policies are not equipped to manage these risks effectively.
However, policymakers and regulators, especially those at the Louisiana Public Service Commission (LPSC), have the opportunity to shield residents from such risks and prevent Big Tech’s burdens from falling on local communities and businesses. Let’s delve into the specifics.
Data centers to significantly increase Louisiana’s grid costs
Depending on how much data center demand grows, Louisiana’s wholesale electricity costs could rise by $14 billion to $26 billion over the next 15 years compared to a scenario without such growth. These projections align with our “Mid” and “High” growth scenarios from the Data Center Power Play report, a national study using the Regional Energy Deployment System (ReEDS) modeling framework.
Louisiana ratepayers risk substantial electricity costs from data centers. These “bulk” costs reflect only wholesale levels, calculated by comparing the Mid and High Growth scenarios with a No Growth scenario. Source: UCS
These expenses are confined to the wholesale level, covering the costs of building and operating large-scale power plants and transmission lines, without reflecting the ratemaking process at LPSC, which allocates these costs to residents and businesses.
Energy bills also include other costs, such as the utility’s profit margin, passed on to retail ratepayers. Louisiana lacks comprehensive protections for ratepayers against these costs. The LPSC’s recent fast-track approval process, introduced by the “Lightning Amendment,” allows for more than half of these costs to be passed to other ratepayers.
The impact on the average Louisiana utility bill remains uncertain, heavily dependent on how the LPSC allocates wholesale costs among different customer types. However, with potential increases of $26 billion in electricity system costs due to data center demand and insufficient protections for ratepayers, Louisianans risk subsidizing Big Tech’s AI projects by billions of dollars.
Louisiana’s reliance on a single fossil fuel: gas
Currently, 75% of Louisiana’s electricity generation relies on fossil gas power plants, making the state notably gas-dependent. Our analysis indicates that, under current policies, Louisiana will continue meeting growing demands with more gas. Data center companies have not attempted to plan for flexible operations to reduce demand during grid stress and limit the need for new fossil fuel plants.
Unless policies change, Louisiana’s power grid will remain heavily reliant on gas, comprising about two-thirds of the electricity mix by the 2040s, according to our 2041 modeling results.
Current policies project Louisiana’s continued reliance on gas-fired electricity. Source: UCS
Louisianans are all too familiar with unpredictable utility bill spikes, as utilities pass fuel cost increases directly to customers. The latest spike, prompted by Winter Storm Fern in January 2026, caused gas prices to soar above $30 per million British Thermal Units (MMBtu)—the highest in 29 years. Just a week earlier, the price was around $3 per MMBtu. Although the impact on utility bills is not yet clear, ratepayers are expected to experience the effects of these price hikes in the upcoming months, even if their power usage remains unchanged.
Even though short-term commodity price changes aren’t captured by long-term modeling frameworks like ReEDS, they can still significantly impact energy burdens. Some Louisianans saw their 2025 bills 29% higher than the previous year due to rising gas prices. During a 2022 price spike, some customers paid double the fuel charges, now about 20-30% of a total bill, compared to the previous year.
Reducing reliance on price-volatile fossil fuels and shifting toward zero-marginal-cost resources like wind and solar can shield ratepayers from such bill increases. Otherwise, Louisiana households will continue shouldering unpredictable costs due to utilities’ overreliance on these fuels, whose prices are increasingly affected by extreme weather events and global conflicts like the wars in Ukraine and Iran. While the US has been somewhat insulated from the latter in terms of gas prices, this is not guaranteed to remain the case.
Impacts on public health and climate from data centers
Beyond rising utility bills, data centers are expected to escalate public health costs and climate damages from Louisiana’s gas plants. Our findings indicate public health damages could range from $1.5 billion to $3 billion between 2026 and 2041 due to increased nitrogen oxides (NOx) and sulfur dioxide (SO2) emissions, both of which can lead to respiratory and cardiac issues. While these health impacts can travel downwind across state lines, they primarily affect local areas.
Data centers contribute to billions in public health and climate damages as Louisiana depends on gas plants to meet rising electricity demand. This calculation compares the Mid and High Growth scenarios with a No Growth scenario. Source: UCS
Between 2026 and 2041, data center-driven increases in heat-trapping emissions from Louisiana fossil fuel plants could result in $35 billion to $87 billion in global climate damages. Though these damages are felt worldwide, Louisiana already faces climate change-related impacts expected to worsen, such as hurricanes, heat waves, and sea level rise. It is crucial for the state to actively reduce both toxic pollutants like NOx and SO2 and heat-trapping emissions such as carbon dioxide and methane.
Uncertainty in data center demand growth
A pressing question remains: how much data center growth will truly occur in Louisiana? The short answer is that it’s uncertain.
Regulated utilities have financial motives to overestimate demand and overbuild, as they earn profits funded by ratepayers on capital infrastructure spending. Hence, it’s essential to approach data center demand forecasts from utilities with skepticism.
To accommodate this uncertainty, UCS explored several data center demand scenarios at the national level. Our “Mid Growth” scenario aligns with other national-level studies. However, isolated recent announcements in Louisiana make the “High Growth” scenario seem not only more probable but possibly even conservative.
Our High Growth scenario predicts about 5 GW of additional data center load on Louisiana’s grid by 2041. Comparing this to Meta Platform’s intentions for a new data center near Rayville, LA, the expansion size remains confidential. However, Mark Zuckerberg indicated last year that the facility could reach 5 GW, consuming roughly six times the yearly electricity of New Orleans. Last year, the LPSC approved Entergy Louisiana’s application to build 2.3 gigawatts (GW) of gas capacity for this data center. Recently, Entergy submitted another LPSC application to construct seven new gas plants totaling 5.2 GW, in addition to the already approved 2.3 GW, for Meta’s data center expansion.
More can be discussed about this new application and who will ultimately bear the costs. However, it’s crucial to emphasize the substantial uncertainty surrounding the data center landscape in Louisiana and beyond, even as press releases and LPSC applications give an impression of certainty.
To understand this uncertainty, we need to look no further than Meta itself. After Entergy secured approval to build the initial 2.3 GW of gas capacity for the data center, Meta altered the financial structure of the planned AI facility. The company transferred 80% of the project ownership to Blue Owl Capital—a riskier entity—and secured the option to exit the data center lease after just four years. Meanwhile, the electricity infrastructure being developed will last for decades. Meta has significantly shielded itself financially, partially through securing a ratepayer guarantee for this lasting infrastructure.
Concerns about an AI bubble burst have intensified since UCS conducted this modeling in late 2025. These concerns arise from several factors, including circular financing, AI’s lack of profitability compared to massive capital expenditures, private credit issues (with Blue Owl at the center), and now, Donald Trump’s war in Iran.
If the AI bubble doesn’t burst as some predict and our High Growth scenario is conservative, the need for safeguards becomes even more pressing as the consequences would be more severe. LPSC policymakers should act now to protect communities from the variety of risks posed by data center expansion.
Looking ahead: Enhanced protections against data center threats
As explored earlier, data center growth could lead to up to $26 billion in additional electricity costs for Louisiana between 2026 and 2041. The state would remain heavily reliant on gas for its power sector, leaving ratepayers vulnerable to unpredictable price spikes. Additional pollution from these fossil fuel power plants serving data centers could cause up to $3 billion in public health damages and up to $87 billion in global climate damages.
Fortunately, LPSC commissioners can prevent a scenario that’s unsustainable for many constituents, particularly with 50% of households in the state already facing financial struggles.
We propose several reforms in our issue brief to guide the state toward a cleaner, more affordable, and reliable electricity system. Recommendations include improving the process for long-term utility resource planning and implementing comprehensive, mandatory ratepayer protections against data center-triggered costs.
We also suggest utilizing Louisiana’s substantial clean resource potential, embracing long-range transmission planning by regional grid operators MISO and SPP. Moreover, reforms are necessary to include a broader range of stakeholder voices in LPSC decision-making. Utilities have long held disproportionate influence at the agency, perpetuated by low transparency and arbitrary participation barriers.
The moment is ripe for Louisiana utility regulators to defend their constituents from data center threats. You can encourage them to act at this link. It’s time they stopped prioritizing Big Tech and utility company interests over communities.
