Data centers’ AI boom spurs new natural gas power plans in the US Southeast

Data center development is accelerating across the US, driven by rising demand for artificial intelligence and cloud computing. According to 451 Research, part of S&P Global Energy, power supplied to US data centers has nearly tripled since 2020, reaching 64.4 GW in 2025, and is projected to increase to 183 gigawatts by 2030.

While the largest contracted data center pipelines are concentrated in the PJM Interconnection grid, the Southeast has seen growth as well. S&P Global Energy estimates that 173 data centers are planned in the region over the next five to six years, representing 9.6 GW of additional electricity demand and increasing the need for new generation and infrastructure investments by utilities such as Entergy.

Entergy, a leading Southeast utility and the dominant investor-owned electric utility in Louisiana, serves more than 3 million customers across Arkansas, Louisiana, Mississippi and Texas, has responded to growing electricity demand from data centers by planning to build natural gas power plants. Entergy is pursuing one of the largest proposed data center power plant builds among regulated utilities in the Southeast, with $12.9 billion in planned investment for 5.2 GW of new gas generation to serve Meta's Hyperion campus in Louisiana, pending state regulatory approval.

Entergy Corp. and Meta Platforms Inc. have struck a major power supply agreement centered on Meta's Hyperion data center campus in Richland Parish, Louisiana. Entergy has said the deal is structured so that Meta pays its full cost of service, though consumer groups actively contest this. State regulators have already approved more than 2.2 GW of power generation proposed specifically to serve Meta's data centers in Louisiana.

Entergy's plans also include at least six new combined-cycle power plants in Richland Parish for the Hyperion project, and two additional plants in Mississippi intended to serve broader state demand growth. Together, these projects represent 6.7 GW of new generation capacity.

The company is also planning to invest $12.9 billion in seven new natural gas plants capable of producing 5.2 GW of electricity for Meta's data center project in north Louisiana. To supply those plants with fuel, ETC Tiger Pipeline is seeking federal approval to build a 13-mile natural gas pipeline in Richland Parish dedicated to serving Entergy's new power stations.

The facilities would support Meta's $27 billion Hyperion campus, which at 5 GW would be the company's largest data center campus to date. Entergy Louisiana has also signed a 20-year agreement securing long-term gas deliveries for the new plants.

In contrast to the Southeast power market, independent system operators/regional transmission organization markets use competitive market rules that create pressure for large power users to pay the costs they impose on the grid.

ISO New England, for example, has proposed requiring new large loads to provide their own incremental generation and be excluded from the Installed Capacity Requirement. The ISO-NE grid operator said these changes would "prevent cost shifts to traditional load," preserve the competitive market structure and avoid adverse reliability impacts.

Similarly, NYISO is considering making large loads directly responsible for resource shortages when those loads contribute to the problem. In addition, the Federal Energy Regulatory Commission's June 18 show-cause orders to six US ISOs were explicitly aimed at preventing residential customers from paying for grid upgrades needed to serve large loads.

The orders require each region to defend or reform its tariffs and processes within 60 days, with a particular focus on cost transparency and protections against shifting costs onto existing customers. All six RTOs have requested 90-day extensions.

However, no federal requirement applies to vertically integrated utilities operating outside RTO/ISO markets. In regulated utility areas, especially in the Southeast, utilities are regulated by state commissions and face little competition. Under this system, utilities can recover the cost of new investments through customer bills, even if those investments are made to serve a single large customer.

This can leave existing customers paying for new infrastructure. As of late June 2026, the Edison Electric Institute said 20 states had approved at least one large-load tariff and another nine were considering proposals.

However, most states, including Southeast states supplied by Entergy, had not yet established effective safeguards to ensure the costs of serving new data center load are paid by developers rather than other customers, leaving ratepayers in states without an RTO protecting, and thereby increasing the potential for existing ratepayers to bear a portion of those costs.

Entergy's $12.9 billion investment includes seven combined-cycle gas turbines totaling 5.2 GW that are being built to serve Meta's Hyperion campus in Louisiana. Entergy said Meta was covering all its incremental costs.

However, environmental public-interest law organization Earthjustice, representing the Alliance for Affordable Energy and the Union of Concerned Scientists in the Louisiana Public Service Commission proceeding, has accused Meta and Entergy of "hiding critical information from the public about how much the project will cost ratepayers."

Consequently, an administrative law judge has ordered Meta to provide additional cost substantiation. Hearings are not scheduled until October, with a decision expected in December.