Meta’s Need for Gas Power Boosts Entergy Spending by $14 Billion

(Bloomberg) -- US utility Entergy Corp. boosted its four-year capital spending plan by nearly a third to $57 billion, mainly to build natural gas-fired power plants for Meta Platforms Inc.’s massive data center development in northern Louisiana.

The Meta complex requires so much energy that Entergy is building 10 new gas power plants to supply it with electricity. Dubbed Hyperion, the AI-focused data center in Richland Parish will be Meta’s largest. Entergy has said the 10 plants will aim to provide more than 7 gigawatts of power — equal to the output of seven large nuclear reactors.

The enormous electricity demands of data centers and artificial intelligence have transformed the US power sector, with utilities rushing to build out generation and transmission to land large facilities in their territory. Since regulated utilities earn their profits by building infrastructure and passing on the costs to their customers, data centers represent a significant opportunity to increase their earnings.

Since most of those new plants won’t come online until 2030 or 2031, not all the spending to finish them is included in the $57 billion plan disclosed Wednesday by the utility, Chief Financial Officer Kimberly Fontan said on an earnings call. Entergy previously had $43 billion earmarked for its four-year capital spending plan. The companies have said Meta agreed to pay for the new infrastructure and the costs won’t be borne by Entergy’s other customers.

Entergy said last month that its agreement with Meta is structured to ensure the tech company pays its full cost of service, with the plan set to deliver about $2.65 billion in savings to other utility customers.

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