Since I first raised the possibility of Madison’s Amazon data center causing residential electricity rates to skyrocket, I have been deluged by emails from readers with links to similar articles across the nation.
Just last week, the Tucson, Arizona city council voted unanimously to reject a massive data center project as residents cheered.
Led by development firm Beale Infrastructure, the rejected “Project Blue” would have created a 290-acre site with 10 buildings, totaling more than two million square feet. The data center would have consumed 600 megawatts of power.
In Tucson, the opposition focused on the enormous water consumption of the data center. This is yet another issue for the Madison data center, which will also consume enormous quantities of water.
In our neighboring state of Louisiana, citizens are complaining about Meta’s proposed $10 billion data center between the tiny town of Delhi and Rayville, 30 miles east of Monroe. The site will be the size of 1,700 football fields. Meta’s CEO Mark Zuckerberg said the project could ultimately be the size of Manhattan. It’s an Entergy Louisiana deal.
Unlike Mississippi, which has no non-profit group specifically organized to fight for electricity consumers, Louisiana has the Alliance for Affordable Energy, non-profit battling against pawning the cost of Meta’s massive project onto Louisiana’s residential customers.
In addition, the Louisiana Energy Users Group (LEUG), industries concerned about skyrocketing electricity rates, are opposing the project. LEUG and other major industries such as ExxonMobil and Dow Chemical have filed briefs opposing Entergy’s plan to build new gas-fired plants to serve Meta’s massive data center.
LEUG wrote in their brief, “Entergy should not be allowed to use its monopoly structure to unreasonably impose financial risks on its existing captive ratepayers to serve the new data center load, while it reaps the return-on-equity benefits to be gained from the unprecedented billions of new infrastructure spending."
Here in Mississippi, the only opposition to the Amazon data center is Bigger Pie, a Jackson non-profit. Bigger Pie’s website states, “BPF researches and shares educational information encouraging Mississippi’s Economic Freedom while discouraging Crony Capitalism to increase Mississippi’s Economic Growth.”
Unlike Arizona, the Madison Amazon data center project bypassed any local approval process, so Madison residents, unlike those in Tucson, had no chance to impact the decision.
The state legislature, in its rushed two-day debate of the bill, also bypassed other normal checks and balances. The Mississippi Public Service Commission was banned by Senate bill 2001 from its normal vetting process. The bill contained 56 pages of exemptions of the data center from normal PSC oversight and review.
Also bypassed were the House and Senate committees regulating public utilities. Instead, the Senate bill 2001 went through the Finance and Ways and Means committees as an economic development bill.
Senate bill 2001 is 316 pages long, so it’s very doubtful many state senators or representatives read it during the two days of special session, top secret debate.
The first 263 pages of the bill list all the special tax exemptions for the Amazon data center. Think about that. It took 263 pages to list all the tax exemptions. So don’t be expecting the data center to help fund any local, county or state government budgets. Given the stress the data center will place on local governmental services, especially the Madison water systems, the data center will be a net drain on our taxes.
The last 50 pages of the bill list all the exemptions the data center will get from normal PSC oversight and regulations. These are regulations that have existed for decades, fine tuned through years of legislative consideration and debate, wiped out in a two-day special session.
The remaining 10 pages are the crux of the bill, Section 22. Section 22 is a complete rewrite and gutting of the way our state has traditionally regulated government-sanctioned monopoly, benching the PSC and mandating that Amazon’s electricity rate is a “trade secret.”
Section 22(3)d states: “Any agreement, including any amendments or renewals, and its terms, including all charges for electrical service, shall constitute a trade secret and confidential and commercial and financial information as referenced in Section 79-23-1 (2), and shall be exempt from public disclosure under the Mississippi Open Records Act of 1981.”
Senate bill 2001 Section 22(3)b states: “The agreement, including any pricing or charges for electric service, shall not be subject to alteration or any other modification or cancelation by the commission, for the entire term of the agreement;”
Senate bill 2001 Section 22(3)c states: “The commission shall not assign or impute a revenue requirement to the customer or the public utility in connection with a general retail rate proceeding, including a formula rate plan review, another cost recovery mechanism, or any proceeding associated therewith, in a manner that assigns or imputes a revenue requirement in an amount and allocation different than addressed by or realized pursuant to the terms and conditions of the agreement.” I could go on and on.
What’s more, Entergy gets to hire an outside auditor to just confirm how much money they spend serving Amazon. Once merely reported as spent, the PSC’s hands are tied and the expenses “shall be deemed used and useful . . . irrespective of whether said permits or requests are granted or approved or actions are found compliant with applicable tariff requirements.”
In summary, our state leaders, in a two-day special session gave Entergy Mississippi, a government sanctioned monopoly, and Amazon, one of the biggest corporations in the world, free reign to spend whatever they want and charge it back to the residential ratepayers of Mississippi.
Within a few years, it will be $500 million a year, $1,000 a year per household.
This will be the biggest transfer of wealth in the history of Mississippi, from average Mississippi homeowners to stockholders of Entergy and Mississippi. It is also the biggest abrogation of government protection of its citizens I have ever witnessed.
How did it happen? Quite simply, all our political leaders got excited about getting a data center. Haste makes waste.
In a press conference last week lieutenant governor said the legislature was relying on the good faith of the Mississippi Development Authority.
But the MDA is all about doing big deals and attracting industry. That’s what they do, promote! They are completely inept at looking at the downside. That job is the responsibility of the PSC, which was cut out, and the legislature which just got giddy.
