Hut 8 commits $16 million for 'closed loop' water infrastructure
Hut 8 has committed $16 million to develop closed-loop water infrastructure for its planned data center in West Feliciana Parish, Louisiana. This commitment was crucial for securing the parish's support, ensuring the project would not strain local water systems. Additionally, Hut 8 will cover costs for electric infrastructure, avoiding taxpayer burden.
Hut 8 has pledged $16 million to establish a closed-loop water infrastructure system for its forthcoming data center in West Feliciana Parish, Louisiana. According to Parish President Kenny Havard, this investment was a prerequisite for the parish's endorsement of the project, as it aims to prevent any adverse impact on the local water supply, a common concern with data center developments. The proposed system will include a dedicated fire protection line and sufficient water for basic operational needs, designed to safeguard residents from potential pressure drops during emergencies.
Beyond water, Hut 8 is also responsible for funding the electrical infrastructure required for the project's initial phase, including a switchyard and power lines. This arrangement ensures that these costs will not be passed on to local taxpayers or reflected in utility rates. Havard emphasized the importance of such commitments in negotiations with large industrial customers like data centers to avoid shifting financial burdens to residents and small businesses.
The project in West Feliciana Parish is also supported by a Payment in Lieu of Taxes (PILOT) agreement. This agreement offers property tax breaks to Hut 8 in exchange for meeting specific investment targets. Should the project reach a $10 billion valuation, an estimated $90 million in PILOT payments would be distributed among the parish's industrial development board, the sheriff's office, the school system, and the parish government over 15 years.
The first phase of Hut 8's data center is projected to demand approximately 300 megawatts of power, span over 500,000 square feet, and create about 250 construction jobs initially. Officials anticipate the facility could be operational by 2027. This development highlights a broader trend in Louisiana, where lawmakers and regulators are increasingly scrutinizing agreements with large data center companies to ensure they cover their infrastructure costs.