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There are over 10,000 data centers in the United States. But no big ones in Mississippi. That’s about to change – thanks to Amazon Web Services (AWS) and a package of goodies from the Governor and the MS Legislature. AWS will build two hyperscale data centers here. The first one will be in Madison County.
AWS will invest $10 billion. It’s just another day at the office for Amazon. It has data centers in over 20 states. But its $10 billion will have a big impact here and encourage more investments. The economic multiplier effect could be billions. Investments beget investments. And jobs – including the usual temporary construction jobs. But also some unusual permanent high tech jobs. It’s almost biblical – the Parable of the Talents.
Amazon’s experienced negotiators know how to play governors seeking investments. They got the deal they wanted for AWS. The Governor got the best deal he could for Mississippi. And Entergy got a big new customer. It’s a big deal for Madison County and for Mississippi. What’s not to like? Or to question?
What about Entergy’s other 461,000 customers? Who negotiates the best deal for them? Entergy has a monopoly in 45 Mississippi counties. A government granted monopoly. Customers in its service area (except for some other big ones) have to buy electricity from Entergy at prices it sets. Who sees that Entergy’s prices for these customers are fair?
The Mississippi Public Service Commission (PSC) is supposed to. It’s job is to assure monopoly customers affordable reliable electricity. Its statutory duty is to determine future electric demand and see that utilities build generation, transmission, and infrastructure capacity to satisfy it. It has failed to do this.
One result of its failures was the Kemper County Lignite plant. That experimental plant didn’t work. It was built to generate electricity for which there was no demand. Mississippi Power paid for most of the $7 billion failure. But the PSC still raised rates 17% on monopoly customers for unneeded electricity from remnants of the plant.
Another result is higher rates for Entergy’s customers. Entergy has two ancient generating plants. They should have been replaced years ago. The PSC ignored them. Entergy continues to run them. Its customers have paid more for expensive and less reliable electricity in the meantime.
Entergy’s CEO said it will invest $2-3 billion in new generating capacity for the data centers and other customers. That’s more than enough to replace the old generating plants with new efficient combined cycle natural gas plants to supply power to the data centers and to Entergy’s monopoly customers. Affordable reliable electricity.
The CEO also said Entergy will invest some of the $2-3 billion in solar plants. That’s virtue signaling. Solar power is intermittent. Unreliable. It destabilizes the electric grid. Will the data centers even take it? Will other customers take it if given a choice?
We have three new PSC commissioners after the last election. They were elected to address past PSC failures and abuses
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