A recent CNBC investigation found that in just the past five years, 16 states have handed out nearly $6 billion in similar sales tax breaks, and that is just the ones that have been disclosed. More often, the amounts are either undisclosed, or, as appears to be the case in Louisiana, officials don’t know the exact cost yet.
An analysis by the state’s Legislative Fiscal Office in May said the incentive could cost the state “tens of millions of dollars or more each year, possibly through (fiscal year) 2059.”
But whatever the cost, Bourgeois said the benefits of the project outweigh it.
“This wasn’t about what the state would win or lose, just that one isolated sales tax,” she said. “This was about we want to compete with Texas. We want to compete with Mississippi, Alabama, Georgia, South Carolina, all our Southern neighbors.”
Meta earned $164.5 billion in revenue last year.
The energy equation in state with spotty grid track record
There are also concerns about the energy needs of the facility, even though Entergy has committed to generate massive amounts of electricity to support it.
The Louisiana Public Service Commission is considering the utility’s proposal to build three new power plants. But a citizen’s group, Alliance for Affordable Energy, is warning that the project could compromise the state’s power grid and increase electricity rates statewide.
“While they’re building new power plants, they’re also adding a huge consumer of electricity,” said Jackson Voss, Climate Policy Coordinator for the group. “Which means we’re all still facing the same vulnerabilities that we were before, but now with a huge new data center added on.”
Louisiana has a spotty track record on grid reliability. According to U.S. Department of Energy data analyzed by CNBC for this year’s America’s Top States for Business study, the average Louisiana customer lost power for 9.7 hours in 2023, the most recent data available, ranking the state in 40th place, though Entergy by itself performed substantially better.
Still, as many as 100,000 Entergy customers in the New Orleans area lost power on Memorial Day weekend when the regional power grid became overloaded.
Entergy’s May said that the added generation capacity for the Meta facility — including 1,500 megawatts of solar power in addition to the gas-fired plants — will make the grid more stable, not less. And he said the project will ultimately reduce electric bills across the state.
“We’re getting new power plants that will be improving in terms of the efficiency. There will be lower fuel costs as a result of adding incremental, more efficient power plants,” he said.
Plus, he said, while Entergy will pay for the power plants, Meta will pay for the infrastructure to connect to them.
“So, hundreds of millions of dollars of support from this customer that would not otherwise have been there had Meta not come.”
More important, he said, the project will be a huge economic boost for Richland Parish — one of the poorest areas in the state, if not the nation.
“This massive $10 billion investment, coupled with the billions of dollars that we’re going to invest ourselves, is going to bring new opportunities for these communities,” he said.
“500 jobs in Richland Parish, or even in this northeast Louisiana region, is transformational,” Bourgeois said.
Plus, she said, this project opens the door for more of the same.
“I could try to sell Louisiana to the world for a long time,” she said. “The fact that [Meta] chose us makes my job a lot easier.”