Entergy is seeking ways to "mitigate the impact" of a proposed $1.8 billion purchase of a Texas gas plant that could raise monthly bills by as much as $7 for some Louisiana customers, according to a report published Wednesday by Utility Dive. CEO Drew Marsh made the statement during the company's second-quarter earnings call, amid mounting scrutiny over the 1.26-GW Cottonwood facility deal and whether it primarily serves new data centers rather than existing ratepayers. The purchase requires approval from the Louisiana Public Service Commission, which has come under pressure from Governor Jeff Landry to protect consumers from unfair power market practices.
The utility's capital investment plan for 2026-2030 remains unchanged at $67 billion, the report states, with the company's data center pipeline holding steady at 7-12 GW of potential load. Entergy reported second-quarter adjusted earnings of $1.03 per share, down from $1.05 per share in the same period last year. A June analysis by PSC staff found the Cottonwood deal could add up to $7 monthly to bills for customers using 1,000 kWh, sparking local news coverage that questioned whether Meta should shoulder the costs since the tech giant is building data centers in Entergy's territory. Atlas Holdings currently owns the Cottonwood plant, which is on the market now.
Marsh told analysts the need for Cottonwood extends beyond powering data centers, calling it "the best option to help with the steel mills and LNG facilities and petrochemical facilities that are continuing to grow in Louisiana." The CEO acknowledged that "Cottonwood isn't the shiniest new plant out there, but it is the most economic opportunity for our existing customers and the non-data center industrial growth that we are seeing." CFO Kimberly Fontan defended the asset's value, noting it "offers megawatts today" and remains competitive compared to the cost and time required to build new capacity. Jefferies equity analyst Julien Dumoulin-Smith wrote in a Wednesday report that the deal is "increasingly in doubt," with the key question being whether Entergy can find additional customers to support Cottonwood and reduce bill impacts.
The controversy comes as Entergy argues that its broader arrangement with Meta will actually lower customer costs over time. According to Marsh's statement responding to the backlash, the technology company will cover grid maintenance and upgrade expenses that save residential and small business customers more than $2.65 billion over the next two decades. Meta's data center plans, announced in March, added roughly $15 billion to Entergy's capital investment blueprint. Meanwhile, new data center additions may be decelerating nationally: analytics firm Wood Mackenzie reported Thursday that 36 GW of data center capacity entered the U.S. pipeline in the first quarter, down 19% from fourth-quarter additions as developers focus on existing projects amid tougher development and regulatory conditions.
Entergy hopes to finalize the Cottonwood purchase in the first quarter of next year and is working with all parties through the regulatory process, though the utility acknowledged the outcome remains uncertain. Since the company's June investor day, interest in potential large-scale projects across its service area has continued to grow, Marsh said, though he characterized that interest as early stage with no new additions to the capital plan or data center pipeline announced. The question now is whether regulators will approve a deal that promises long-term savings through Meta's infrastructure payments but threatens immediate rate increases for households already facing rising energy costs.