Both are aimed at addressing the “lightning” fast pressure on electricity demand from AI data centers and industry, which have seen action from Governor Landry (see Lightning Speed Initiative), and Senate President Cameron Henry (see grid modernization task force).
Lewis’: Directs staff to open a docket to develop a framework to give guidance to utilities and large customers, like data centers, on the consumer protections the Commission would use to ensure new (or expanding) large customers (and utilities) do not harm residents and other businesses.
Coussan’s: Immediately removes guardrails and gives utilities and data centers “certainty” that they can build what they want with little scrutiny to serve resource intensive industries.
Lewis’: Calls for a transparent policy making process, developed with insight from experts and intended to balance the interests of residents, utilities, and other stakeholders.
Coussan’s: Skips past any formal process and creates policy with no input from the public or any stakeholders and without weighing any possible unintended consequences.
As a regulator of electric utilities, the LPSC’s role is to set policy that weighs and balances the interests of all kinds of customers. Their job is not to find the “fastest” way to give a utility or single customer exactly what they want. Other regulators around the country are actually taking the time to consider how to balance the interests between residential customers whose bills are skyrocketing, and the companies that are promising unprecedented investments and jobs. States are doing this because people already can’t afford to keep the lights on, and are increasingly vocal about shutting these projects down, which, among other negative impacts, are raising household electricity costs.
First, Coussan’s proposed directive waives the “market based mechanism” policy the Commission designed to ensure utilities source the lowest cost energy possible. Allowing utilities to bypass this process means we won’t know if the option they put forward is the cheapest available. Remember, the utility business model incentivizes them to spend more, not less, on investments like power plants, as those investments drive profits.
The directive also dramatically speeds up the approval process for the investments, moving from a typical 10-12 month decision-making timeline to not more than seven months, which will hobble efforts to protect residents against bad deals. The approval process takes time because it includes expert witnesses, analysis, discovery, testimony, and an independent judge’s recommendation. A seven month runway decreases the Commission’s and other stakeholder’s understanding of the project on the table, limits our ability to ask questions, and will effectively push the process straight to settlements, which tend to benefit the utility.
In order for a utility to get this “lighting” treatment they have to meet a handful of criteria, including:
You may remember that Meta’s agreement with Entergy for their new data center near Monroe was for 15 years. This is already far too short when you consider that most gas generation runs for 30-40 years, and therefore the agreement assumes the rest of the costs will be paid for by other Entergy customers — you and me. The 10 year agreement laid out in this directive is a drop in the bucket.
The other criteria included in the directive severely limits the amount of costs the new large load customer will cover. Here again, even the Meta deal was better, with the tech giant covering much more than 50% of the capital expenses for the power plant projects for the first 15 years (although not operations expenses or all transmission investments). In other states, regulators are requiring longer contracts, up to 30 years, and commitments that new large load customers will cover typically between 75-100% of the new investment’s upfront costs.
CM Lewis’ directive, on the other hand, directs staff to open a docket to examine how to bring new resources online, while also setting expectations for consumer protections. This would have begun with defining what a “large load” is. For example, is a 2.5 GW data center a Large Load? Or does a new refinery or steel plant also count? CM Lewis also directs staff to consider incentivizing flexibility on behalf of the customers, which could actually protect the grid’s reliability and limit energy market volatility in peak summer and winter seasons. These details are crucial elements to policy making that considers possible negative outcomes, and balances energy security for everyone, and would allow residents and businesses a sense of confidence that the Commission has guardrails in place.
The criteria does not limit or define what kind of customer the utility may serve with this new pathway. Nationally, where frameworks to serve massive new loads from hyperscaler data centers have developed guidelines and even operational expectations, this directive is silent, leaving the door open to any kind of industrial customer to enable a utility to expedite new capital investment, thus pushing more risk more quickly to the rest of us.
Another clear danger with this directive is that it does not limit the types of technologies that may be approved through this expedited process. At least a couple of Commissioners have made clear their enthusiasm for investments in new nuclear power in Louisiana, including a directive at last month’s LPSC meeting requiring utilities in the state to file site proposals for new nuclear facilities to the commission by February 2026. Nuclear projects notoriously run over budget and behind schedule, and the current zeal for nukes is focused on first of their kind small modular reactors which require more scrutiny not less. Not to mention, the threat of an approval of a new power plant with CCS attached, which could be all but guaranteed if filed under this directive.
“Move fast and break things” is Mark Zuckerberg’s motto, and tech industry’s modus operandi, but it is no way to regulate. It is a way to break things.
Unfortunately, a lot of Louisianans are already broke.
