Louisiana Regulators Asked to Investigate Shady Meta Financing Deal That Could Leave Households Paying for Tech Giant’s Electricity

Baton Rouge, LA —

Today, Earthjustice filed a request to the Louisiana Public Service Commission (LPSC) to investigate Meta’s recently revealed financing scheme, which establishes an additional parent company for its data center developer and leaves Meta with only 20% stake in that holding company. Meta did not reveal its intentions through the LPSC regulatory proceedings to create a new parent company  for Entergy’s gas plants and incorporated the new company on the same day the LPSC approved Entergy’s application.

If the LPSC fails to protect households from Meta and its private equity investors’ shell games, the result could be a multi-billion-dollar disaster for Louisiana households.

Earthjustice, representing the Alliance for Affordable Energy in Louisiana and the Union of Concerned Scientists, previously challenged Louisiana utility Entergy’s proposal to build three methane gas plants for the Meta data center. Meta has begun construction on what will be its largest data center yet in Richland Parish, Louisiana, requiring an estimated over 2,000 megawatts of electricity to power the 4 million-square-foot data center, named Hyperion.

Of major concern is that Meta’s financing deal gives the company significant leeway to walk away from the data center in four years. Entergy’s methane gas plants being built for the data center have a 30-year lifespan, and Entergy will get paid for its gas plants by ratepayers if Meta abandons the data center. If the data center closes before the gas plants’ life span ends, which this new financing structure enables, the cost will appear on household utility bills. Already, the more than half a billion cost of transmission needed solely for the data center will be paid by all Entergy’s customers as soon as construction is completed.

When the LPSC approved Entergy’s proposal, the commissioners offered assurances that a 15-year contract term with another LLC, Laidley, (Meta’s original SPV who contracted with Entergy for the energy), would cover Entergy’s costs. But the parental guarantee that the LPSC assumed would hold the parental company (Meta) responsible may not exist with the creative financial structure in place that assures the private equity investors that own 80% of the data center holding company a profit.  Meta formed a new SPV, Beignet Investors and this company (which as an SPV has no assets) is now Laidley’s parent company.

Beignet Investor, Laidley’s parent company, was registered as an LLC in Delaware on August 20, 2025, the same day the Louisiana PSC voted to approve Entergy’s gas plants for the data center. (This has not previously been reported.) It appears that Meta was planning to change the financial structure of the project for months and was just waiting for LPSC approval before taking any “public” action on the financial structure change.

Background

Technology giants  are spending billions on new data centers, often using circular financing deals, and borrowing heavily from private equity lenders, drawing comparisons to the financial arrangements that caused the financial crisis of 2008. In many cases, the interlocking financial dependencies driving the construction of data centers and new methane gas plants to power them is difficult to track.

Technology companies often shy away from taking on the huge up-front costs of building and running data centers. So they are setting up new companies solely to build and run their data centers, known as a special-purpose vehicle, the same practice that Enron used to conceal its fraud. Many of the new companies building data centers for tech giants have zero profits and billions of dollars in debt.

Data centers run 24-hours a day, requiring massive amounts of energy to power both the computers and their cooling systems. Unconstrained electricity demand from data centers threatens to raise electricity rates for others, increase pollution, consume water, and undermine climate goals. The public should not foot the bill for data centers’ electricity.  Earthjustice attorneys will continue to appear before Public Utility Commissions to protect residential and small business owners and to ensure that clean energy remains a key consideration in regulators’ decisions.