Public Service Commissions Power the Midterms

Southern states have long been welcoming to harmful infrastructure that often hits marginalized communities the hardest, especially ones that are Black, impoverished, and rural. We’re seeing that history repeat itself with data center development, which has gained a foothold in red states where Black communities are vulnerable and lack the financial means to resist. But in the upcoming midterms, residents in two of these states have a unique opportunity.

Below the House and Senate and gubernatorial races will be elections for state public service commissions (PSCs), the governing bodies that regulate the services and rates of public utilities. Because data centers require tremendous amounts of power, and PSCs usually have final authority over investor-owned public utilities, these commissions can ensure better outcomes for ratepayers and can block data center development that harms communities.

In Louisiana and Georgia, there are high-stakes races to fill two seats on each of their PSCs. If Democrats win, they would gain control of the commissions for the first time in decades. That would be a major deal for data center development, as Democratic leaders would be more likely to present hurdles when it comes to building new facilities.

IN LOUISIANA, TWO SEATS ON THE PSC are vacant because incumbents have reached their term limits: Democrat Foster Campbell of the Fifth District and Republican chairman Eric Skrmetta of the First District. If Democrats can flip the First District’s seat held by Skrmetta, they would earn the majority.

District 1, which covers most of the New Orleans suburbs, has long been a GOP stronghold. Republican state Rep. Stephanie Hilferty is running there against Democrat Connie Norris. District 5 encompasses much of northern Louisiana, where Republican John Atkins is facing off against Democrat James Green.

All eyes are on District 5 because it’s the home of Richland Parish. Meta is looking to build a data center called Hyperion there, and needs the support of the PSC to make it happen. In April, the PSC voted to expedite an application filed by energy company Entergy Louisiana for seven new natural gas power plants to fuel the project, bringing the total to ten, as three others were approved last year.

It was made possible by the commission’s quiet changes to its approval process, which now allows for utility companies to fast-track infrastructure deals with energy-intensive customers, like data centers.

Hyperion was first slated to use 2.5 gigawatts of power, but now needs an additional 7.5 gigawatts. It’s slated to cost $50 billion to build and will require four million square feet of space. A final vote on that is expected from the current PSC on November 18.

Entergy Louisiana has said that its 20-year deal with Meta includes the company paying for any of the electricity infrastructure being built to fuel it. But Meta and Entergy’s deal has no clause stopping Meta from walking away before it’s all been paid for, which might transfer the costs of the new gas plants to Louisianans.

Making Hyperion more attractive to community members, the Richland Parish’s school board announced that teachers could get bonuses of more than $50,000 this year. The school system receives a share of local sales taxes, which have surged as hundreds of workers have arrived in the parish to build the facilities. This is undoubtedly attractive to not just Richland Parish community members but also Louisianans as a whole—the state has the highest poverty rate in the country.

Louisiana Public Service Commissioner Davante Lewis, a Democrat who represents District 3 and is not up for re-election, was the sole vote against the proposal. Louisiana is different from other states when it comes to data centers, he says. “We are a very industrial-heavy state, almost 30 percent of all the electricity that is used in the state of Louisiana is used by what we would call a large industrial or commercial user.”

But petrochemical refiners like Exxon, Chevron, and Shell, which have long maintained facilities that use hundreds of megawatts more than the loads of other states, didn’t need their own power; data centers do, and beyond the environmental impact of these projects, there are concerns about increased costs for ratepayers. Contracts being offered by utility companies range from 10 to 20 years, which is a long, risky period.

Although the Louisiana PSC can’t approve whether a data center comes to a community, they have the power to understand any energy service agreements, which are contracts between a provider and customer. Board members have to look at costs and decide if ratepayers are picking up costs on behalf of the utility company.

“Ratepayers and constituents of mine are starting to say, ‘Why am I the only one bearing the risk if something happens to a data center,”’ Lewis said. “‘If they go bankrupt, if they leave?’ The question arising is ‘What does this mean for my utility bills?’”

IN NEIGHBORING GEORGIA, which has over four times the number of data centers as in Louisiana, the state’s PSC election is critical. Last year, Democrats won two of the five seats, spurred by public outrage about the electricity rates and the data center development. Up until that point, the commission had been completely GOP-controlled.

Incumbent Peter Hubbard, a Democrat representing District 3, is facing off in a rematch against Republican Fitz Johnson, after Hubbard won a special election for the seat last year. In District 5, Republican Josh Tolbert is running against Democrat Shelia Edwards. If Hubbard can hang on to his seat, and if Edwards is elected, Georgia’s PSC will be majority-Democrat for the first time since 1996.

This is particularly important because Georgia is a data center developer’s dream. With very few guardrails governing approval, construction, and activity of data centers, developers have flocked to the state in record numbers. In 2024, the Georgia state legislature, under significant pressure from voters, passed legislation meant to curb tax breaks for developers. But when the bill landed on Republican Gov. Brian Kemp’s desk, he vetoed it.

Data center developers are also attracted to the state’s lax regulatory guidelines and the influence of the PSC’s current Republican majority over approving utility agreements.

Earlier this year, the Georgia PSC approved changes to Georgia Power’s rules (the state’s largest electricity company), which commissioners said would ensure that companies requiring significant power would pay their fair share. But Georgia Power needs to build out several huge gas power plants to serve rapidly escalating demand.

Enter clean-energy options, such as solar. Solar industry PACs are investing heavily in the PSC race, with one connected to the Solar Energy Industries Association spending $250,000 to run pro-Hubbard and Edwards ads. If Democrats hold a majority on the PSC, they could possibly turn to alternate sources of energy to fuel the state’s data center boom.

Solar energy is typically cheaper than gas, its plants can be built quickly, and it has much less of an impact on the environment. Like Louisiana, Georgia’s PSC doesn’t approve developments, but they do have control over how they’re powered, and solar has the potential to be a safer option than gas.

Only a state or federal moratorium would be able to slow down the development of data centers in states like Louisiana and Georgia.

VOTERS ACROSS THE COUNTY overwhelmingly dislike data centers, especially when they’re being built in their backyards. Recent polling has shown that nearly 7 in 10 Americans oppose the construction of a data center in their local area. While the approval of these projects by politicians is often shrouded in mystery, rising utility costs are one of the biggest concerns with the build-out, making voters particularly motivated as they head to the polls.

Louisiana’s conservative-controlled legislature isn’t poised to focus on regulating data center development, so the state’s PSC makeup is particularly important. Over the past few years, the commission’s Republican majority has been instrumental in coordinating data center–friendly agreements between developers and energy companies. Local governing bodies have welcomed projects through expediting permitting and zoning processes, because economic development in underinvested areas is hard to come by.

“It’s unfortunate because there’s no guardrails,” says Ashley Kennedy Shelton, founder, president, and CEO of the Power Coalition for Equity and Justice. “I often say that Louisiana is like the last great colony, and it’s unfortunate, but it is certainly how it feels when you think about how we are one of the richest places in the country, and yet we have the poorest people.”

Instead of focusing on cleaner sources of energy like solar and wind, Louisiana has stood firm in relying on gas and oil. Companies looking to build polluting infrastructure flock to Louisiana, as there’s little political will to respond in ways that put the needs of citizens first.

“We have won the race to the bottom. We’ve got the worst quality-of-life indicators, but we’re with nothing but natural gas and oil and all of these resources in our state. We are suffering, and that’s because of the decisions of the leadership,” says Shelton.

Shelton is hopeful about the election outcome. “These two seats represent an opportunity to see a more progressive Public Service Commission that is going to put the needs of the citizens of the state first, and that’s a huge opportunity.”