Meta’s Louisiana Data Center Sparks Debate Over Who Should Foot The $5 Billion Power Bill: '...Put Other Ratepayers At Risk Of Having To Absorb Hundreds Of Millions,' Says Expert - Entergy (NYSE:ETR), Amazon.com (NASDAQ:AMZN)

The ongoing dispute in Louisiana over who should bear the cost of new power plants required for Meta Platforms Inc. META $10 billion data center is heating up.

What Happened: The Louisiana Public Service Commission received new testimony on April 11 from consumer advocates and climate groups. They urged the state regulator to reject a proposal by Meta’s electricity provider, Entergy Louisiana, to pass on $5 billion in construction costs for the plants to its entire customer base, reported Business Insider on Saturday.

Entergy ETR has put forward a proposal to construct three new natural gas power plants to support Meta’s data centers. The utility contends that the data center could have a significant impact on the state, potentially creating 300 to 500 jobs with an average salary of $82,000.

However, advocates and climate groups argued that Entergy’s 1.1 million electric customers should not bear the cost of Meta’s power usage. Cathy Kunkel, an energy consultant, also cautioned that the utility’s plan could “put other ratepayers at risk of having to absorb hundreds of millions, if not billions of dollars, of additional costs” tied to Meta’s data center.

Even Walmart WMT in Louisiana has raised concerns, seeking a guarantee that Meta’s increasing power demand will not affect it or other Entergy customers in the state.

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Why It Matters: The controversy surrounding the funding of Meta’s data center highlights the broader issue of who should bear the cost of tech companies’ increasing power consumption. As these companies continue to expand their data centers, the demand for electricity is likely to rise, potentially leading to higher costs for consumers.

These concerns stem from the fact that Meta’s power requirements have grown since the company first revealed its intention to construct an AI data center in Louisiana, which has contributed to higher service costs for Entergy. The precise amount of additional electricity Meta is requesting remains unclear, as the relevant details have been redacted from the filings.

This situation is further complicated by the reports of recent pullout of Amazon AMZN and Microsoft MSFT from data center leases, raising questions about the sustainability of the AI development boom. However, Nvidia NVDA and Amazon have recently denied reports of slowdown in AI data center construction.

The momentum rating of META is 75.93% while its growth rating is 75%, according to Benzinga’s Proprietary Edge Rankings. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.