Cleco to Build 756MW Gas Plant for Applied Digital’s Louisiana Data Center

Louisiana power utility Cleco has announced plans to construct a 756MW natural gas power plant to supply electricity to Applied Digital’s data center campus in Rapides Parish, Louisiana. The facility represents the single largest load ever served by the utility, highlighting the growing energy demands of the AI and high-performance computing (HPC) sector.

The natural gas plant will support Applied Digital’s under-construction 430MW Delta Forge 1 data center, which broke ground in January 2026. The first phase of the campus, located on approximately 500 acres, is expected to include two 150MW buildings, with initial operations slated to begin in mid-2027. The companies initially signed a power supply agreement in May 2026, but the capacity and type of generation asset were not disclosed at that time.

Under the terms of the deal, Applied Digital will cover the full cost of constructing the power plant, as well as the associated power lines, substations, and other infrastructure needed to connect the data center directly to Cleco’s electric grid. The company will also fund a ten-year power supply agreement, which Cleco stated is necessary to ensure sufficient electricity is available when the data center begins operations next year. As part of that agreement, Cleco plans to purchase 370MW of capacity from the Tenaska Frontier Generating Station, a natural gas plant in Texas.

The new 756MW plant, expected to operate for approximately 30 years, will serve all of Cleco’s customers, not just Applied Digital. In regulatory testimony, Cleco’s director of regulatory strategy, Austin Finn, noted that “absent the Customer taking electric service, the revenue requirements associated with this necessary generation investment would have been borne entirely by existing customers.” Cleco estimates that the data center will lower costs for existing customers by covering a larger share of storm, grid, and other expenses, while reducing the rate increase that would otherwise be required for the new gas plant.

Applied Digital, originally founded in 2021 as Applied Blockchain, has pivoted to developing AI and HPC data centers and has signed multiple large-scale deals. Its contract portfolio spans five AI Factory campuses, totaling 1.4GW of critical IT load and approximately 2.15GW of grid-connected utility power. The company’s other major projects include the Polaris Forge 1 and 2 hyperscale campuses in Ellendale and Harwood, North Dakota, with the former set to be leased to CoreWeave and much of the latter to an unnamed investment-grade hyperscaler. A third campus, Polaris Forge 3, located on 600 acres in an unnamed northern state, will offer 300MW of critical IT load to the same hyperscaler that signed on for capacity at Delta Forge 1, with initial operations anticipated in August 2027.

Cleco serves central and south-central Louisiana, supplying power to residential, commercial, industrial, and wholesale customers. The utility manages more than 2.6GW of generation capacity and maintains an extensive transmission and distribution network. The partnership with Applied Digital underscores a broader trend of data center developers directly financing power generation infrastructure to meet the growing energy needs of AI workloads, while utilities seek to balance new load with cost impacts on existing ratepayers.