Mississippi’s data center boom brings significant investments, but also potential hidden perils
State leaders tout billion-dollar deals, but secrecy, energy demands and mounting costs raise specter of ordinary people footing the bill
As Mississippi’s data center boom surges ahead at breakneck speed, state leaders have described $26 billion in new projects as transformational—so beneficial, they say, that the details must remain secret.
With construction underway and politicians celebrating the massive economic deals, a more basic question lingers: Will Mississippians’ power bills increase because of these energy-hungry facilities, some of which consume as much power as a medium-sized city every day?
Officials have promised they will not. Boosters of the $6 billion AVAIO Digital facility now rising on the outskirts of Brandon say the project will strengthen the economy without burdening ratepayers. Entergy Mississippi, the state’s largest electric utility, has echoed that message repeatedly.
“Electric grids operate on economies of scale,” an Entergy spokesperson told The Mississippi Independent. “So, when large customers establish service to power a major new project, they help spread the utility’s fixed costs to operate and maintain the grid over a wider customer base, driving down electricity prices for everyone.”
Last year, the Mississippi Legislature passed Senate Bill 2001, rewriting the state’s economic development laws to include massive data-processing facilities. The measure granted such projects generous tax breaks, fast-tracked permits and unprecedented confidentiality, in part by cutting the state’s public utility regulator out of the process. Mississippi Public Broadcasting reported that tax exemptions are, “The carrot to bring these data centers and promised jobs to Mississippi,” but noted that “low benchmarks to fulfill required investments means these companies can perform well below their claims and still qualify.”
The bill was written largely with Amazon Web Services’ $10 billion data campus in Madison County in mind, but it also opened the door for Compass Datacenters’ $10 billion complex in Meridian and AVAIO’s $6 billion Brandon facility, together expected to consume more electricity than all of Entergy Mississippi’s residential and commercial customers combined in 2023. Elon Musk also bought an old gas plant in Southaven to help generate power to his xAI supercomputer across the state line in Memphis, where residents have complained of air pollution from generators installed at the site.
Amazon and Compass are expected to create thousands of jobs, whereas the AVAIO facility will employ 60 people. Typically, most jobs go to construction rather than long-term operations, and the latter tend to be support rather than tech jobs. As one expert told Mississippi Public Broadcasting, “At their core, data centers are similar to the server racks often found in the back of an office, just scaled up to warehouse size. They require workers to maintain, but not many.”
As for the downsides, industry reassurances about energy rates have not held up well in other states. A Bloomberg analysis of wholesale electricity prices at 25,000 locations found that power costs near data centers have surged as much as 267 percent during the last five years.
Entergy’s CEO, Haley Fisackerly, told Mississippi Today in September that data centers would have the “opposite effect” when asked whether such energy-intensive facilities might raise rates for regular customers in Mississippi. But in the same interview he said: “I can’t promise you they won’t go up.”
The company’s own filings are illuminating. Documents reviewed by The Mississippi Independent show that Entergy offers discounted electricity to large industrial customers through “net monthly incentive credits,” discounts that the utility can legally recover by adjusting rates for everyone else. In plain terms: When a data center gets cheaper power, ordinary customers make up the difference.
That accounting method is common among regulated utilities, but its consequences can be far-reaching. Entergy has not disclosed what Amazon, Compass or AVAIO will pay for power, but other states show the scale of these reductions, which includes infrastructure costs to build more power plants.
An Earthjustice analysis comparing cryptocurrency and data center rates across five states found steep discounts for high energy users. In Texas, prices dropped from 14.5 to 2.5 cents per kilowatt-hour, an 82.8 percent reduction. New York saw rates fall from 22.3 to 3 cents, an 86.5 percent cut. Georgia’s rates declined from 13.7 to 4.6 cents (66.4 percent), Pennsylvania’s from 18 to 5.2 (71.1 percent), and Arkansas’ from 12.3 to 1 (91.9 percent).
Critics say the result is that Mississippians, who pay some of the highest monthly power bills, are subsidizing some of the most energy-hungry companies on earth.
“Entergy Mississippi makes money by spending money on capital projects and then charging their customers for those plus an allowed return on that investment,” said Logan Burke, executive director of the Alliance for Affordable Energy, a New Orleans-based watchdog group. “And so, the more capital projects they can have, the more they appear as a good investment to their shareholders. Entergy Mississippi’s capital project plan just explodes year over year in response to that legislation and the promise of all these data centers.”
Exploiting regional need
Data centers, the physical backbone of the cloud economy, are proliferating across the South, drawn by states willing to go to extraordinary lengths to attract them.
“Data center developers target legislatures willing to circumvent their utility commissions,” Burke said. “That means less public oversight into these deals.”
The incentives, she added, are enormous, and mostly secret.
Others were more blunt in their assessments.
“That’s part of the extractive economy we see across the South,” said Jen Powis, managing attorney of Earthjustice’s Gulf regional office. “Industries taking resources and pushing the impacts over the fence line.”
Though officials insist that the projects will transform Mississippi’s economy, others question the tradeoff.
“Normally, when you have someone investing $6 billion, there’d be hundreds, if not thousands, of jobs,” said Stephen A. Smith, executive director of the Southern Alliance for Clean Energy in Knoxville. “That’s not happening here. There will be 60 jobs at the Brandon facility.”
Trouble elsewhere
Across the country, states that once courted data centers with open checkbooks are beginning to rethink their generosity. What were once symbols of technological progress are increasingly seen as strains on public budgets, electric grids and clean-energy goals.
In Connecticut, state Sen. Norm Needleman, who helped pass a 2021 law designed to lure data centers, is now reconsidering it after one developer sought priority access to electricity from the state’s only nuclear power plant, effectively diverting carbon-free energy from homes and businesses. “That affects our climate goals,” Needleman said at the time. “It’s additional demand of renewable energy that we would have to replace.”
In Georgia, lawmakers recently imposed a two-year moratorium on new tax incentives after concluding that massive electricity and water demands outweighed the benefits. In South Carolina, utilities warn that data centers are being built faster than new power plants can come online. Dominion Energy struck a deal to sell Google electricity for 6 cents per kilowatt-hour, less than half what residential customers pay.
Watchdog groups estimate that state and local governments now lose more than $1 billion annually in tax revenue from data center subsidies. In recent years, Virginia, Texas and Illinois each saw such costs soar by more than 1,000 percent.
Smith’s response: “States need to get out of this distortion field and illusion of hyperbole and ask: What factual information shows we’ll get a worthwhile return on this investment?”
Environmental toll
In the United States, power consumption by data centers is expected to account for nearly half of all growth in electricity demand through 2030, according to international forecasts. By then, they could use up to 12 percent of total domestic electricity use.
Data center facilities also rely on billions of gallons of water for cooling, emit air pollutants from diesel generators, and generate vast amounts of electronic waste. Their construction often paves over green space, causes declines in underground aquifers, amplifies heat and noise pollution, and strains local power grids.
Mississippi’s vulnerabilities add another layer. The state ranks fourth in the nation for blackout frequency, with outages lasting an average of 14 hours, more than double the national average of six, according to federal data.
To guard against interruptions, Amazon was granted approval in June 2025 to install 391 emergency diesel generators for its Mississippi campus, according to its state air pollution construction permit. More than 380 of those units weigh between 55,000 and 87,000 pounds and can burn up to 200 gallons of diesel per hour when running at full load, according to the manufacturer. Storage tanks will hold 2.7 million gallons of diesel on site, the permit notes.
“To daisy-chain hundreds of diesel generators together is inappropriate and, we think, violates the Clean Air Act,” Earthjustice’s Powis said. “Diesel generators have to be turned on and off routinely and are highly polluting.”
Unlike traditional power plants, these generators sit within a few hundred feet of residential homes and about a mile from a hospital. In a full blackout, they would consume 77,000 gallons of fuel per hour, or 1.84 million gallons per day.
It is not clear what backup power system AVAIO will use for its Rankin County facility.
Promises and realities
State, county and business leaders insist the deals will bring prosperity. They argue that projects like AVAIO’s mark a turning point for Mississippi, one of the poorest and least innovative states in the nation, and could place it at the forefront of the digital frontier.
Supporters say the Brandon complex will create dozens of high-paying tech jobs and hundreds of construction jobs, and position Mississippi as a new hub for artificial intelligence and cloud computing. The facility’s design includes water-efficient cooling, rainwater capture, rooftop solar and fiber connections linking directly to major U.S. data hubs.
“This project will not only transform Rankin County and the Metro Jackson region, it will transform our economic landscape and lead to even more high-tech leaders choosing Mississippi,” said Gov. Tate Reeves in an Aug. 2025 statement.
But others remain skeptical that the benefits will trickle down.
“In many ways, we are still very much a plantation economy,” said Powis of the Southern economy. “We all know who benefits from all of this big investment is generally not the communities who are already struggling to pay the bills.”
Image: Data center equipment (Creative Commons/IFFL.org)