In a special legislative session in 2024, lawmakers excitedly passed a package of incentives to lure one of the world’s richest corporations to the nation’s poorest state. Two years later, Amazon now has four data center projects underway in Mississippi. One, in Canton, is already running, while the other three – in Ridgeland, Clinton and Vicksburg – are in the works. 

In interviews and press conferences, Mississippi leaders, local officials and the state’s largest power company have all spoken glowingly about the historic investment, expected to be a total of $25 billion coming to the state along with 2,000 jobs. Amazon’s business here promises an immense spike in tax revenue, new job training and a large investment in the area’s power grid. 

At the same time, critics of the project highlight what isn’t being shared publicly about Amazon’s arrival. As part of the 2024 deal, the Mississippi Legislature gave the company an express route through well-established regulatory checkpoints. Namely, the state’s utility regulator, the Public Service Commission, has a much depleted role overseeing spending by Amazon’s power provider, Entergy Mississippi, in relation to the data centers. 

The agreement between Amazon and Entergy, including what rates the company pays, is confidential. That in of itself isn’t unusual, Entergy said; such agreements with large, industrial customers, such as past deals with Nissan and Continental Tires, are usually protected from the public to preserve competitiveness for both sides. 

What is unusual, utility experts and watchdogs from outside the state say, is the long list of exceptions the 2024 law carves out for the Amazon-Entergy agreement. 

For one, the law allowed the agreement to move forward without approval from the PSC, which is in charge of regulating public utilities and protecting ratepayers. The law also prevents the commission from altering any terms of the contract for its entire duration – the length of which is also hidden – such as how costs are shared between the two sides. 

Those critics have panned the legislation for hamstringing public involvement in a process that impacts electric rates for customers of the state’s largest power company. 

“It is the worst piece of legislation I think I have ever seen in my entire time watchdogging the utility industry,” said Daniel Tait, research and communications director for the Energy & Policy Institute since 2017. “It systematically undermines every guardrail and every check that existed, which wasn’t even a lot, in statute to protect customers.”

Other protections the 2024 law gave Entergy to support Amazon’s development include:

• Any spending or construction by Entergy in relation to the project doesn’t need the commission’s prior approval. 
• Entergy can begin recovering money it spends to build new facilities before those facilities are in service. 
• The law removes the 4% cap on annual rate increases related to spending tied to the Amazon data centers. 
• Any Entergy spending on construction, infrastructure and property acquisition related to the data centers is deemed “used and useful” even before the utility has the necessary permits. “Used and useful” is language regulators use to describe spending that can then be charged to ratepayers. 

In press releases and interviews with Mississippi Today, Entergy, which serves about 459,000 customers in the state, maintained that the Amazon data centers will benefit the utility’s other ratepayers in the long term.

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In March, Entergy announced its “Fair Share Plus” pledge, in which it says data center projects from companies such as Amazon, Meta and others in the Deep South will save its ratepayers billions of dollars. In Mississippi, those savings will add up to $2 billion over the next 20 years, the utility company said. 

“Thanks to the direction and engagement of Governor Reeves, the Mississippi Legislature and the Mississippi Public Service Commission, these large technology customers will help pay the cost for needed power grid maintenance and upgrades that would otherwise have been borne by our existing customers,” Haley Fisackerly, Entergy Mississippi president and CEO, said at the time. 

The company’s power grid, it says, was in need of new sources of generation either way, and the large amount of power Amazon buys will help shoulder those costs. Jeremy Vanderloo, Entergy’s vice president of business operations and strategy, told Mississippi Today in a March interview that the utility had retired about two-thirds of its generation capacity in the last 15 to 20 years. 

“We would need to add to our system even if we didn’t have any growth at all,” Vanderloo said.

In addition to new power plants in Ridgeland and Vicksburg, Entergy recently announced it’s replacing a 50-year-old plant in Greenville with a combined-cycle natural gas facility called the “Delta Blues Advanced Power Station.” The plant, initially slated to go up around 2030, will be more reliable and efficient, saving ratepayers money, Vanderloo said. 

The Amazon investment means Entergy can build the new plant even sooner. Because of rising demand and increased costs for gas and supplies, Vanderloo said the $1.1 billion facility would have cost almost twice as much if they had stuck to the 2030 timeline.

“By pulling these (projects) forward, that’s a big part of some of the savings that we’ve seen for customers, recognizing we were going to have to build these plants even without (Amazon),” Vanderloo said.  

The company is dealing with other uncertainties around fuel prices, he said, pointing to the ongoing wars in Ukraine and Iran. Vanderloo added that the cost of damages from Winter Storm Fern were the most impactful by a storm ever in its service territory.

As Entergy told Mississippi Today last year, customers’ electric rates were going to go up regardless. But with Amazon’s business, the company projects that by 2030 rates will be 16% less than they would otherwise have been, saving the average customer over $30 a month. Customers will see that difference as early as 2027, the utility projects.

Entergy’s assurances, though, are unverifiable because its agreement with Amazon is confidential. That secrecy also extends to any amendments or renewals of the contract. 

Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School Environmental and Energy Law Program, studies the impact of data centers on ratepayers around the country. While there’s a degree of secrecy around most data centers, the fact Entergy didn’t need PSC approval for its deal with Amazon is “fairly unique,” Peskoe said.

“I can’t think of another state law passed by a legislature that exempts a specific contract from regulatory review,” he said. 

Peskoe also questioned Entergy’s point that it needed to spend money on new generation anyway: Without Amazon’s arrival, what would Entergy’s generation needs have been? Would it have needed the same size or type of power plants as it’s building now?

“I don’t know how you’d verify it,” he said. 

Entergy said the revenue from Amazon more than makes up for the difference in its new generation costs. Mississippi Today asked the company for a price comparison of generation costs with the data centers versus without, but Entergy declined to share specific figures. 

Typically, the public can intervene and challenge a public utility’s spending on the front end, Peskoe explained. This is part of how the public ensures utilities, to whom regulators guarantee some amount of profit to sustain themselves, only include necessary costs when they start recovering that money through the rates they charge customers. 

In the case of Amazon, the PSC can still review Entergy’s expenses on the back end and prevent certain expenses from going into rates. By not having approval beforehand, Vanderloo said there’s a risk that Entergy will spend millions of dollars that the PSC then doesn’t allow it to recover through rates. 

But that’s an unlikely scenario, Peskoe argued. 

“ Generally for utilities, this sort of risk that a regulator finds an expense imprudent is generally low, and I think will be particularly low here where there won’t be public engagement on these issues,” he said. “ There should be risk on Entergy because presumably it’s capturing some profits from this deal.  What would be inappropriate is if there’s any risk here for ratepayers, and that’s what’s really impossible to tell, because we don’t know what’s in the contract.”

Tait, with EPI, took it a step further, arguing “there’s no real risk to Entergy here” because SB 2001 deems the utility’s spending as inherently justified. 

“Any protection that might actually exist (for ratepayers) is hidden,” he said.

Proponents of the Amazon deal point to language in the 2024 law that says the data centers must provide an “economic benefit” to Entergy’s other ratepayers. The legislation, though, neither specifies what benefits those are nor includes a way of assuring the benefits exist.  

Last week, a report commissioned by environment-focused nonprofits suggested the Amazon data centers have likely already increased rates for Entergy’s Mississippi customers. The report also pointed to measures enacted in other states to protect ratepayers from data centers’ energy consumption.

In recent years, regulators in Ohio, Pennsylvania, Virginia and Kansas have instituted certain requirements for new data centers, such as minimum bill amounts and contract lengths. The regulatory shift shows that “existing rate structures are inadequate to protect ordinary customers from cost shifts driven by hyperscale electricity users,” the report said. 

While Entergy may have included some of those requirements in its agreement with Amazon, “it’s impossible to know,” Ben Havumaki, one of the report’s authors, said.

When asked about the criticism over transparency, Vanderloo acknowledged, “It is difficult because you are trying to just take our word for it.” But the speed at which Entergy needed new generation to support Amazon required a faster regulatory process, he said. 

“ We just didn’t have the time to go through that process, and the Legislature understood that we had a clear need for new generation,” Vanderloo said.

Sen. Josh Harkins, chairman of the Senate Finance Committee and the lead author of SB 2001, echoed that point.

“It was just tightening up the timelines on some of the requirements and getting the thing through the PSC, not dragging it out as long as sometimes they normally do,” said Harkins, a Flowood Republican.

The senator said he didn’t hear any complaints from the PSC regarding the bill, and that the commission will still be able to “monitor and have input” on Entergy’s data center spending. 

When asked how the 2024 law changes the PSC’s regulatory process, Central District Public Service Commissioner De’Keither Stamps only pointed to the commission’s ability to prevent Entergy from recovering costs on the back end. 

“If it does not pass the prudency review, the citizens will not pay for it,” Stamps said. “I can guarantee you have one commissioner who does not mind voting no and doesn’t mind speaking up.”

The state’s Public Utilities Staff, which advises the PSC on legal matters, declined to comment for this story.