LPSC clears expedited path for Cleco power plan tied to data center

The Louisiana Public Service Commission (LPSC) unanimously approved a request from Cleco Power to expedite the regulatory review of its plan to supply electricity to Applied Digital's $3.6 billion Delta Forge 1 artificial intelligence data center campus in Rapides Parish, near Boyce. This decision moves the case forward without an administrative law judge's final recommendation, aiming to meet a March deadline crucial for Cleco's power contract with Applied Digital. The project, announced in May, involves two initial facilities totaling 300 megawatts, expected to begin operations by mid-2027, and an eventual electric load of approximately 430 megawatts by 2028, making it Cleco's largest single customer load.

The expedited process falls under the LPSC's new "Lightning Initiative," adopted in December, designed for large industrial loads. While the LPSC's Wednesday decision doesn't constitute final approval of Cleco’s proposed natural gas generation or transmission infrastructure, it paves the way for an evidentiary hearing to decide the merits of the application. Cleco asserts that Applied Digital will bear the costs of the temporary capacity agreement and project-specific infrastructure, arguing this will benefit existing ratepayers by covering system costs.

However, critics, including licensed professional engineer Chris Justin, expressed concerns about waiving normal competitive bidding procedures for Cleco's proposed gas generation. Justin urged the commission to ensure the generation isn't primarily paid for by existing ratepayers, warning against creating a future cost shift. The "Lightning Initiative" allows for waiving procurement requirements under specific conditions, including a signed long-term electric service agreement and customer revenues covering at least half of fixed costs, with a goal for the commission to vote within eight months while preserving its authority to determine public interest and prudence.