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The Governor recently announced that Amazon Web Services will spend $10 billion on two hyperscale data centers in Mississippi. This is a big deal for Mississippi and for Madison County – where site prep for the first data center is underway. Data centers house thousands of servers that receive, store, and process digital data. They make the World Wide Web work. They use lots of electricity.
Their need for lots of electricity is what brings Amazon here. Mississippi’s electric utilities can generate almost unlimited electricity – cheap reliable electricity using natural gas from pipelines that cross the state from Texas and other western states headed to northeast markets. Amazon has contracted with Entergy Mississippi for electricity. It’s one of 50 utilities that have legal monopolies to generate, transmit, and/or distribute (sell) electricity in Mississippi. It’s one of only two utilities that make a profit doing this. The others do it at cost. Entergy’s rates are among the highest of all 50 utilities.
Entergy Mississippi is owned by Entergy Corporation which also owns utility monopolies in Louisiana, Arkansas, and Texas. Entergy Corporation stockholders received $918 million in dividends last year from profits on electricity it sold in Mississippi and other states.
Amazon’s contract terms with Entergy Mississippi and its price of electricity are secret. Entergy Mississippi also sells electricity to 461,000 other customers in 45 Mississippi counties where it has a monopoly. Their price is not secret. It’s vetted and posted by the Mississippi Public Service Commission (PSC). That’s how things worked before the Governor’s and the Legislature made Entergy Mississippi’s Amazon deal off limits for the PSC. It’s a safe bet that Amazon’s price is much lower than Entergy Mississippi’s other customers.
Amazon’s lower price is reasonable. Why? Because Amazon is a big customer. Probably the biggest in Entergy Corporation’s four-state monopoly territory. And it’s not a captive customer. It didn’t have to come to Mississippi. It has data centers in 20 other states. It came here because it got a good deal on cheap reliable electricity.
The deal requires Entergy Mississippi to build probably two new combined cycle natural gas plants to generate electricity for Amazon plus some extra. And to upgrade and add distribution infrastructure. Entergy Mississippi’s CEO says it will spend $2-3 billion on this. Including several hundred million on solar electricity – which Amazon required as part of the deal. (Virtue signaling?) Will the data centers actually use intermittent solar electricity? And risk blackouts? Would you – if you have a choice?
Entergy Mississippi’s CEO likes solar power. He says it’s an industrial recruiting advantage. It probably is when recruiting virtue signaling woke prospects. Two former PSC commissioners who received solar company campaign contributions rubber stamped Entergy Mississippi’s solar projects. They were not reelected. Does Entergy Mississippi already have enough solar plants to destabilize the grid?
Entergy’s CEO also says many PSC regulatory decisions have “valued” the important role power plays in economic development – and that Entergy Mississippi is in the economic development
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