Louisiana’s Grid Gambit: Is It Time to Let Private Power Play?

Last month, the New Orleans City Council voted unanimously to impose a one-year moratorium on data center development across the city. The debate was heated and familiar: overwhelming concerns about the strain these facilities could place on an already vulnerable grid, the risk of compromised reliability during our next storm season, and the potential for higher electricity costs passed on to everyday consumers. Similar scenes are unfolding in communities nationwide—from California to Virginia—as electricity demand surges into an era of growth not seen since the post-World War II boom.

State and federal regulators face mounting pressure to deliver solutions: ways to provide speed-to-power for hyperscalers and industrial users without burdening taxpayers with subsidies or existing ratepayers with endless infrastructure upgrades. Enter consumer-regulated electricity, or CRE, a deceptively simple idea that is starting to look like common sense.

The concept is modest in scope yet bold in implication: let private companies build and operate private electricity systems not connected to the main grid for sophisticated, high-demand customers who sign up voluntarily. No interconnection, no public-utility oversight, no socializing of costs onto residential ratepayers. It’s a parallel track, not a demolition of the existing one.

Travis Fisher, director of energy and environmental policy studies at the Cato Institute, describes it plainly: “CRE is private, islanded grids serving sophisticated customers through voluntary contracts, without interconnecting to the existing grid or facing economic regulation.” That single sentence contains the reform’s elegance: risk stays private, innovation stays free, and Louisiana families stay protected.

The urgency is hard to overstate. Data centers and other hyperscale facilities are arriving like rock stars, each demanding massive amounts of reliable power—yesterday. Attracting them has become a global arms race, and Louisiana, blessed with natural gas resources, industrial corridors, and a can-do spirit, ought to be a contender. Yet our current regulatory system offers little flexibility and few options beyond overly burdensome and time consuming regulations and complex rate approvals that allow for the cost of building investor owned utility infrastructure to be subsidized by ratepayers like me and you. But this isn’t just an economic competition—it’s a national security one. As Energy Secretary Chris Wright recently warned, “AI is going to have massive national defense and national security ramifications. If China got meaningfully ahead of us in AI, we become the secondary nation of the planet.” He put the challenge bluntly: the only thing that could stop American leadership in AI is “the failure to build the electric generating capacity that needs to happen.”

CRE offers another way. It gives Louisiana a chance to help America win the AI race and welcome more economic growth and opportunities without taxpayer funded incentives or forcing existing customers to underwrite massive grid expansions they never asked for.

Momentum for the idea is growing. Last year, New Hampshire passed a streamlined law, HB 672, which exempts off-grid electricity providers from traditional utility regulation. Meanwhile, at the federal level, Sen. Tom Cotton’s DATA Act would take the New Hampshire blueprint national, carving out the same exemption from federal utility rules for off-grid generators. The payoff? Swifter, smarter, more customer-first energy—without red-tape, bureaucratic delays or cost to residential consumers..

To be clear, CRE-style reforms does not amount to broad deregulation or a Wild Wild West-type free-for-all. As evidence from New Hampshire suggests, the law has not yet sparked a sudden surge of new projects—and that is exactly the design. CRE does not guarantee instant transformation; it provides permission. It creates a clear legal pathway: if a qualified party wants to build an independent system, they may do so without navigating endless regulatory hurdles. The reform lowers barriers without forcing change, allowing markets to respond naturally when—and if—the opportunity arises.

That alone matters. Investment responds to clarity and certainty. Under laws like HB 672, entrepreneurs can explore bespoke systems using gas, solar, geothermal, or other technologies, delivering power directly to large-load users if and when demand materializes. If it does, private capital bears the risk. If it doesn’t, nothing happens. No stranded assets. No lost revenue for incumbents. No higher bills for families. As Fisher puts it: “CRE provides an elegant solution. It is a complementary policy… a market-driven parallel path for large load customers that can work alongside all existing options. It enables regulators to deliver the speed to power that these hyperscalers desperately want, and it allows them to do that at no risk to the grid and no cost to ratepayers.”

The reform also revives a lost art: genuine price discovery. For a century we’ve pretended electricity can be priced by committee rather than by market signals. The result is chronic mismatch—oversupply in some places, crushing shortages in others, and bills that feel “affordable” only because no one is allowed to test the alternative. Lyons’ diagnosis is blunt: “We have no earthly idea how to price electricity or what the actual price should be.” Privately islanded systems, operating under real contracts, would finally generate honest pricing information. Regulators could study those signals and borrow the best ideas without risking public funds. “Regulators can learn a lot from innovations that are developed on the private grid that can then be incorporated back into the traditional, socialized grid,” he notes.

Critics will worry about reliability, equity, or the fate of incumbent utilities. Yet CRE is designed to sidestep those traps. It targets only large, risk-tolerant customers capable of managing their own exposure. It imposes no obligation on the main grid. And far from threatening existing players, it may offer them an escape hatch. Lyons argues, “CRE doesn’t just help new players. It should be a home run for the incumbent utilities too. No one is better positioned to succeed.”

The deeper promise is psychological as much as technical. For too long Louisiana has treated electricity as a public utility problem to be solved by public utility minds. CRE flips the script: let outsiders, contrarians, and even restless insiders try something different. “You don’t get Uber from the taxi cab industry. You don’t get FedEx from the US Postal Service. You get that from innovators and out-of-the-box thinkers who are not constrained,” Lyons says.

We need every arrow in the quiver right now. Grid strain is real, demand is surging, and the old playbook is running out of pages. CRE-style reforms would cost taxpayers nothing, expose ratepayers to zero added risk, and revive the entrepreneurial energy of visionaries like Thomas Edison, George Westinghouse, and Nikola Tesla that first made the electricity sector so great over a century ago.

Louisiana has never been shy about making bold bets when the prize is big enough. Attracting the next wave of energy infrastructure investment, shielding families from rate increases and cost overruns, and proving that entrepreneurship, free markets and consumer choice work—even in electricity—seems prize enough. The switch is there. All we need now is the courage to flip it.

Melissa Landry is Director of the Center for Energy at the Pelican Institute for Public Policy.