Cleco plans 756-MW gas plant alongside Rapides data center
Cleco plans to construct a new 756-megawatt natural gas power plant to primarily supply electricity to Applied Digital's large data center in Rapides Parish, Louisiana. The data center is projected to be Cleco Power's largest single load, using up to 430 megawatts. Applied Digital will cover significant costs for power infrastructure and capacity, which Cleco argues will reduce costs for existing customers.
Cleco, an electric utility, plans to build a new 756-megawatt natural gas power plant as part of a comprehensive agreement to supply electricity to Applied Digital's substantial data center in Rapides Parish, Louisiana. According to testimony filed with state regulators, the $3.6 billion data center is expected to consume up to 430 megawatts, making it the largest single load ever served by Cleco Power.
Under the proposed deal, Applied Digital would finance the entire cost of new power lines, substations, and other equipment necessary to connect the data center directly to Cleco's grid. Additionally, Applied Digital would pay for a separate 10-year agreement for 370 megawatts of power capacity from the Tenaska Frontier Generating Station in Texas. Cleco also proposes a larger, long-term investment in a new 756-megawatt natural gas plant, which it asserts is needed regardless of the data center due to the planned retirement of older plants.
Cleco argues that the data center's substantial electricity payments, estimated at nearly $3 billion in non-fuel charges over 15 years, would significantly reduce costs for existing customers by covering a larger share of grid expenses and mitigating future rate increases from the new plant. Cleco President and CEO Bill Fontenot stated that the project would also bring major economic benefits to Central Louisiana, including about 1,000 construction jobs and 200 permanent jobs with a median annual salary of $92,000, along with additional local economic activity.