Louisiana’s Energy Moment: Why Competition—Not Regulatory Shortcuts—Will Power Growth and Lower Costs

As Louisiana enters 2026, energy and infrastructure policy remain front and center. Last month’s announcement of another major artificial intelligence data center project coming to the state underscores Louisiana’s economic potential—and the growing importance of getting our regulatory framework right.

The challenge is immediate and significant. Electricity demand is rising rapidly, driven by aging generation and transmission infrastructure, electrification trends, new manufacturing, electric vehicles, and the explosive growth of data centers. In recent years, this surge in demand has contributed to upward pressure on electricity prices, creating sticker shock for families and businesses alike. It is estimated base electric utility rates in Louisiana have increased by roughly 40 percent since 2018, with an additional 40 percent increase projected by 2030.

But these projections are not destiny. The relationship between electricity demand and consumer costs is not linear—and when managed wisely, rising demand can actually work in consumers’ favor. Research shows that large, steady loads like data centers can help spread fixed grid costs more broadly, lower average rates, and support new investment in generation. Some studies estimate that for every gigawatt of new large-load demand added to the grid, customer rates could decline by 1 to 2 percent when costs and savings are allocated transparently and fairly.

Capturing those benefits, however, requires policy discipline. It demands a regulatory framework grounded in competition, transparent cost allocation, and predictable rules—not shortcuts that shield incumbent monopoly utilities from market pressure. Recent developments at the Louisiana Public Service Commission (LPSC) illustrate why that distinction matters.

In order to meet growing electricity demand, we need to generate more power, and we need to do it quickly. But the process for permitting new, capital-intensive energy infrastructure projects is deeply flawed. Overlapping, vague, and excessively complex permitting and environmental review requirements routinely delay or derail projects without delivering meaningful environmental gains. An expanding web of federal statutes—including the National Environmental Policy Act, the Clean Water Act, and the Endangered Species Act—adds years of uncertainty and significant costs to energy development.

According to a 2025 White House Council on Environmental Quality report, completing a federal Environmental Impact Statement takes more than two years on average. This level of bureaucracy does little to improve environmental outcomes, but it does undermine grid reliability, raise consumer costs, and stall economic growth. Permitting reform is not about weakening standards; it is about restoring predictability and proportionality so needed infrastructure can be built responsibly and on time.

Momentum is building at the federal level for comprehensive permitting reform that restores certainty and limits unnecessary delay. Pelican recently made the case for reforms that reduce regulatory whiplash and allow markets—not bureaucratic inertia—to guide investment decisions. A faster, fairer permitting process is essential to expanding energy supply, strengthening infrastructure, and sustaining long-term economic growth.

The guiding principle is straightforward: eliminate unnecessary barriers while preserving clear rules and competitive safeguards. When done correctly, permitting reform accelerates investment without sacrificing accountability or consumer protection. As electricity demand continues to grow this balanced approach becomes even more important.

That principle was tested last month when the Louisiana Public Service Commission advanced a new effort known as the “Lightning Initiative”  as a way to expedite large-scale projects like data centers.

While the goal of attracting major investment is laudable, the structure of the initiative misses the mark. Rather than streamlining timelines within a competitive framework, the proposal exempts incumbent monopoly utilities from market-based safeguards. It allows utilities to bypass competitive bidding for new generation and capacity additions, effectively sidelining independent producers, private capital, and alternative procurement models.

These competitive tools are not theoretical—they are precisely what have helped other states keep prices lower and reliability higher. In a letter to the Commission, Pelican warned that abandoning competition risks shifting the full cost of new utility-owned infrastructure directly onto ratepayers, without the discipline that competitive pressure provides.

This is especially concerning at a time when Louisiana families and businesses are already grappling with higher electricity bills. Suppressing competition now—just as large new customers could help spread costs more broadly—risks squandering an opportunity to ease rate pressure rather than exacerbate it.

Louisiana has seen this movie before. Pelican’s research on Right of First Refusal (ROFR) laws shows that insulating monopoly utilities from competition in transmission development leads to higher prices, slower buildout, and weaker reliability outcomes. Even when policies are well-intentioned, limiting competition consistently leaves consumers paying more for decades.

The Lightning Initiative risks repeating the mistake other states have made, but on a much larger scale. Instead of harnessing data center growth to drive efficiencies and lower costs for all customers, it could entrench monopoly control and lock ratepayers into higher-cost infrastructure.

Following a tense and closely watched meeting, the Commission voted to move the initiative forward. But it is not too late to course-correct.

The choices Louisiana makes now will determine whether the data center boom delivers broad-based prosperity—or higher costs and missed opportunities. This moment calls for pragmatic, bipartisan leadership. Governor Landry, LPSC commissioners and state lawmakers can demonstrate that economic growth, grid modernization, and affordability are not competing priorities. When guided by market principles, they reinforce one another.

That means streamlining genuine bureaucratic barriers while preserving competitive safeguards. It means transparent cost allocation, open procurement, and regulatory predictability. When costs and savings are shared through market discipline, everyone benefits: data centers secure reliable power, investors gain certainty, and Louisiana families and businesses see more affordable electricity.

Put simply, the path forward should lead toward abundance and affordability through principled free market competition—not regulatory capture dressed up as economic development.