Powering Growth, Protecting Customers in the Gulf South

Electric companies drive economic development, grid investments, and customer benefits across the country, thanks in large part to the win-wins they create for communities through their work with hyperscalers, large manufacturers, and data center developers.

Last week, EEI President and CEO Drew Maloney moderated a discussion between EEI Vice Chairs Drew Marsh, chair and CEO of Entergy; and Chris Womack, chairman, president, and CEO of Southern Company, during a Gulf South Business Roundtable event in Washington, D.C.

The group discussed the importance of industry-government coordination, electric companies’ commitment to protecting and serving customers, and the opportunities that are being unlocked in the Gulf South by hyperscaler investments.

“We’re seeing this region lead on affordability initiatives, on smart data center development, and on community engagement, with projects that benefit everyone,” Maloney said. “We’ve seen study after study show that grid-connected data centers can drive down prices and deliver meaningful benefits to customers. Entergy and Southern Company are case studies and role models for the rest of the country for the work they are doing in the Gulf South.”

Key Takeaways:

Hyperscalers Are Paying Their Fair Share – And Then Some

Context: Fair share agreements ensure tech companies and data center developers pay for the energy infrastructure they need – projects that benefit all customers by spreading fixed costs, creating jobs, and unlocking new streams of tax revenue to support schools, roads, bridges, and fire departments.

Entergy’s Fair Share Plus pledge ensures data centers pay their own way – and ultimately drive benefits to existing customers. In Louisiana, for example, school teachers in Richland Parish went from being among the lowest paid in the state to some of the highest paid thanks to increased tax revenues from an Entergy-powered Meta data center project.

Electric Perspectives: 

• “Our Fair Share Plus pledge lines up with the Ratepayer Protection Pledge that several hyperscalers signed in Washington a few months ago. … These projects are adding to schools and paying for new fire engines, libraries, and roads that help our communities.” - Entergy’s Drew Marsh
• “These projects are incredible economic engines for many of our communities. … Because of how we structure these projects and negotiate these contracts, we’re making sure they’re not only paying their fair share: They’re paying a premium that allows us to hold rates flat, or you’re seeing rates decline.” - Southern Company’s Chris Womack

Electric Companies Put Customers First

Context: Independent studies from EPRI, Columbia University, and The Brattle Group conclude that data centers and large customers put downward pressure on rates when connected to the grid. Previous research from Charles River Associates and Lawrence Berkeley National Laboratory also found that customers outside of the PJM region have largely been shielded from cost increases related to data centers and benefit from new large loads.

Entergy’s work with data center developers, for example, is driving $7 billion in savings to the company’s 2.3 million customers in Arkansas, Louisiana, and Mississippi.

Meanwhile, Georgia Power’s data center work allowed regulators to lower customer rates by approximately $50 per year – following last year’s approval of a multi-year rate freeze thanks to Georgia Power’s work with data centers and large load customers. Similar freezes have been approved in Alabama thanks to Southern Company’s work.

Electric Perspectives:

• “If you look at the history of electricity and what our industry has done for more than 100 years, a cornerstone of our work has been a commitment to reliability, to service, and to our communities. That community focus has been tied to economic development and how we grow our communities, grow our tax base, and make communities better.” - Southern Company’s Chris Womack
• “We start by putting the customer at the center of everything we do. All of our decision making cascades from there. … Our communities, collectively, are very supportive of these opportunities because of how much these projects support our existing customers.” - Entergy’s Drew Marsh

New Infrastructure Is Efficient, Resilient, and Ready to Meet Demand

Context: Electric companies ensure the new infrastructure built to support data centers is new, modern, efficient, and beneficial to all customers.

Southern Company is developing or upgrading more than 1,300 miles of transmission and distribution lines across Georgia and Alabama. In Louisiana, Entergy estimates its work with Meta alone will lead to a 10 percent reduction in storm recovery and grid resilience costs to its customer base.

Grid-connected data centers enhance the resilience of the broader system, give tech companies the reliability their facilities need to operate, and subsidize the construction of new energy infrastructure and upgrades to existing assets.

Electric Perspectives:

• “My expectation is we will continue to have large-scale customer growth. That will be the engine that remakes the transmission and distribution grid. It will make rebuilding existing infrastructure more affordable for our customers. That’s what I’m excited about. There will be benefits for new customers coming in and all of our existing customers, as well.” - Entergy’s Drew Marsh
• “We’re going to meet this new demand, but we’re going to continue to make the right investments to make sure we strengthen the grid for our existing customers. That’s the responsibility that we have. We’re going to uphold that responsibility and execute around it.” - Southern Company’s Chris Womack