As with most things, increased inflation over the last several years caused electricity rates to rise more sharply than the typical trend all across the U.S., including Mississippi. Over these same last few years, electricity demand has also risen more sharply due to changes in consumer habits and increased use of technology in the economy, namely data.
These forces at work may likely mean more opportunity for Mississippi. Why? First, while electricity prices have risen everywhere with inflation, electric utilities in Mississippi and the South maintain well below average electricity rates, staying 20% or more below the U.S. average. Next, through the years, Mississippi has been better than most at keeping a steady hand in electric grid planning, regulation and policy and, while there have been and always will be challenges, Mississippi is not facing the level of electricity-related challenges some other states are facing in terms of high costs and short supply concerns. In March, a Washington Post story was titled Amid Explosive Demand, America is Running Out of Power, and the story began with, “Vast swaths of the United States are at risk of running short of power as electricity-hungry data centers and clean-technology factories proliferate around the country, leaving utilities and regulators grasping for credible plans to expand the nation’s creaking power grid.” In January, Amazon Web Services announced plans to build a massive electricity-consuming $10+ billion data complex in Madison County. In terms of good jobs and economic growth, this project is first rate and not the low-wage, low-skill factory jobs Mississippi celebrated in years past. This project will be an IT sector anchor, providing high-skilled, high-pay job opportunities for the Jackson Metro and likely to attract more IT sector investment and jobs. So, what were the main reasons AWS chose Madison County and the Jackson Metro area?
Cost of electricity was the first issue. Data storage centers require constant, enormous loads of electricity to operate. Thankfully for Mississippi, Entergy has had some of the lowest rates in the nation and region – in January ranking 8th lowest out of 22 comparable Southeast U.S. electric utilities in residential rates alone. Like many other large companies, AWS also demands a portion of the power at their facilities be renewable power. Fortunately, Entergy had recently announced just enough renewable power in its portfolio to meet that requirement – comprising about 15% of its capacity mix. Next, the hyper-competitive world of tech innovation requires AWS to move as fast as possible to construct and begin data operations. Because Mississippi’s routine electric utility regulatory process to meet the power needs would have taken too long, a creative solution was needed. Governor Reeves and his MDA team worked with the Legislature and created a plan to streamline the regulatory process, allowing Entergy to begin quickly acquiring materials with long lead times for new power plants. This was critical in outsprinting other states, as demand for power plants is high globally and supply chains constrained. This faster, more efficient regulatory process helped Mississippi win the project and did so without sacrificing safeguards for existing Mississippi electricity customers. With the streamlined process needed to compete for the project, the Mississippi Public Service Commission will still have watchdog approval of the prudency of all costs associated with the power needs of the project, and Mississippians’ elected commissioners will continue to have the final decision on all rates for Entergy customers. Thanks to these safeguards, the project’s benefit to Entergy customers will be massive as the huge new customer is added to the system. It’s basic economies of scale, where average costs go down as scale goes up. Residential and existing business customers will get the future rate benefit of an additional large power user, who will soon be paying a large share of the ever-needed investments to maintain and expand the power grid. For many years to come, existing customers will also see the benefit in rates of newer, more efficient natural gas power plants replacing older, less-efficient units more quickly than previously planned. Finally, to lay the groundwork for the project, the local foresight to prepare a site paid off. Years earlier, long before Mississippi was on AWS’s radar, the Madison County Economic Development Authority invested substantial dollars in preparing a site, complete with an Entergy substation, to be ready when the day came that a major industrial project would need a turnkey-ready place for a future facility. Having the foundation already laid with the power needs and to accommodate speedy construction enabled the project. On top of more than 1,000 new high-pay, high-tech jobs, AWS will quickly become Mississippi’s largest taxpayer and some metro schools and counties could see their budgets nearly double. And if Columbus, Ohio, where AWS sited a similar facility is any clue, the Jackson Metro area could be on its way to being a growing technology hub thanks to its landing of AWS. As other states falter with foolish energy policies, being a place with an abundance of reliable energy availability at a competitive cost will likely continue to pay dividends for MS and its citizens.
This post was authored and sponsored by the Mississippi Energy Institute.
18 comments:
The MEI is obviously carrying Entergy's water.
I think Shock-Way is responsible for bringing the Amazon facility to MS
The Shockster is way out of the loop on this. Big time ball, not for the Shock Way.
So they're saying while the higher demand for electricity in other states has made rates go up, in Mississippi higher demand will make rates go down. Hmmm I don't think I'm gonna spend my savins just yet.
Corporate welfare for thee,
No social welfare for me.
The rest of the country looks at Mississippi like Latin America: just a far off place to extract natural resources from, people be damned. You think those low energy rates are going to remain constant? What in the hell pipe dream are they selling to the ignorant here? Well you can wake up in 20 years to find out.
10:01 is correctamundo! This article only highlights the disparity in welfare benefits. The need for Medicare expansion is critical, and only getting worse.
The people who live in communities where these IoT and IoB data gathering facilities are located, they don't like them so much. See The Epoch Times "How Big Tech Is Consuming America's Electricity And Water". Did our korn-pone legislators and administration even consider the negative environmental impacts? Inquiring minds would like to know.
Ha lil chokes amateur, parking meter garbage griftin butt wouldn’t know how the hell to deal with this. This is major pro level griftin here. The freakin Catalina wine mixer.
The adults don’t even pretend to put up with Antar and his silly nonsense. Everybody knows all he’s good for is having press conferences to remind people that emergency sirens go off at noon on the first of every month.
Just 3 weeks ago, Amazon announced layoffs in their AWS division.
https://www.cnbc.com/2024/04/03/amazon-layoffs-hundreds-of-jobs-cut-in-cloud-computing-unit.html
I would have preferred the relocation of Oracle.
I live in Northern Virginia; the world’s largest concentration of data centers is here, particularly around Dulles airport. Our local utility Dominion Power has cried “uncle” as it cannot keep up with the power demands and despite the beneficial contribution to local property taxes, the data centers have worn out their welcome here.
No one here is giving them tax breaks or infrastructure or training subsidies, so they are now looking to poorer and more desperate states (like Mississippi) who will do so. Make sure that they are situated where residential areas are near and that MP&L has the generation capacity (Grand Gulf?) to supply the extreme power needed without browning out residential users. Good luck, but watch out!
If you build it they will come! (unless it's a beef plant, or a... well... usually!)
@9:39
I’m not going to argue your points but I’ve lived in Dominion/Duke Energy territory before and they suck. Entergy is vastly superior to Dominion despite Entergy’s numerous flaws.
Sound familiar? https://www.aboutamazon.com/news/aws/aws-indiana-investment-11-billion
@9:39
I think you meant NOT near a residential area
More on what VA, AZ, GA and other states are doing:
As internet data centers multiply, efforts to control them are growing
Localities are starting to increase taxes and regulations on data centers as the football-field-sized buildings come under greater scrutiny.
By Antonio Olivo
https://www.washingtonpost.com/dc-md-va/2024/04/30/data-centers-regulations-northern-virginia-georgia-arizona/
Post a Comment