Environmental law group seeks probe of Meta's $27 billion Louisiana data center financing

By Laila Kearney

NEW YORK, Jan 14 (Reuters) - U.S. environmental law group Earthjustice asked utility regulators in Louisiana on Wednesday to investigate the financing of a $27 billion Meta data center project, which Earthjustice says threatens to leave everyday homes and businesses on the hook for build-out costs.

Environmental and consumer groups are increasingly pushing back against the energy-intensive data center expansion, arguing that it will significantly increase global warming emissions and raise power bills.

The request, filed with the Louisiana Public Service Commission, is the first time Earthjustice has formally petitioned a utility regulator to probe data center financing, and the group said it believes it is the first of its kind nationwide.

The motion centers around the financing of Meta's largest-ever data center project - a more than 2 gigawatt planned facility in Richland Parish, Louisiana.

The Louisiana Public Service Commission approved an application last year for the local utility to build three new gas-fired electric generating stations and transmission to power the data center. The original financing structure came with a parent-company financial guarantee that would ultimately fall on Meta, which was the parent company of the site's developer at the time, Earthjustice said.

Under a financial agreement later announced between Meta and its joint venture partner Blue Owl Capital, a newly formed company called Beignet Investors became the new owner of the data center and the parent company of the project's developer, said Earthjustice, which cited an analysis of the deal reported by the Wall Street Journal.

Meta, meanwhile, became a lessee. The new arrangement also allows Meta to exit its lease after four years, instead of an initially agreed-upon 15 years, potentially allowing it to stop paying for energy or infrastructure build-out costs early, the motion said.

"If Meta ends the lease after four years almost none of the costs of the generating station or the associated transmission will have been paid up by Meta at that point," said Earthjustice attorney Susan Stevens Miller. Instead, those costs would be moved to customers of the local utility, Stevens Miller said.

Meta and Blue Owl were not immediately available for comment.

(Reporting by Laila Kearney; Editing by Nia Williams)