ATLANTA (AP) — As data centers flood Georgia, utility regulators face a big decision: Should they let Georgia Power spend more than $15 billion to increase its power capacity by 50% over the next six years to serve the computer complex? Or will utilities overbuild and leave other ratepayers shouldering the bill?
It will be one of the largest expansion projects in the United States to meet the insatiable power needs of AI developers. Georgia Power, Atlanta-based Southern’s largest subsidiary, said in testimony filed last month that the expansion would boost the state’s economy and “allow Georgia to contribute to the nation’s focus on the global importance of artificial intelligence and the digital economy.”
“Given the number of companies interested in doing business in Georgia and the volume of customer loads that have either signed contracts or are in advanced discussions, it is important to continue to support this tremendous growth opportunity,” company officials said in testimony.
But electricity bills have become a major political issue in Georgia and nationwide, with grassroots opposition to data centers driven in part by concerns that other customers will subsidize the tech giants’ power needs.
“I think what’s happening in Georgia is in a sense a perfect microcosm of what’s going on across the country,” said Charles Hua, executive director of Powerline, a nonprofit that works to increase public participation in utility regulation. “You’re going to see electricity demand growing at the fastest rate in decades, and you’re going to see electricity prices rising at the fastest rate in decades.”
growing political problems
The cost of electricity was a key issue in last month’s gubernatorial elections in New Jersey and Virginia, two data center hotspots. In North Carolina on Tuesday, Democratic Gov. Josh Stein cited concerns about data centers as one of his arguments against Duke Energy seeking a 15% rate hike for both utilities.
In Georgia, the five elected Republicans on the Public Service Commission will make a decision on the Georgia Power proposal just weeks after voters castigated Republican leadership, overwhelmingly ousting two incumbent Republicans on the commission in favor of Democrats. The two Democrats won on campaigns centered on the six rate increases the Georgia Power Commission has allowed in recent years, even as the utility agreed in July to freeze rates for three years.
After a hearing next week, commissioners are scheduled to take a final vote on Dec. 19. The two new Democrats won’t take office until January, and current commissioners have rejected opposition requests to delay a decision until then.
Brionte McCorkle of Georgia Conservation Voters, a group that advocates for carbon-free energy and supports Democrats, worries the vote will be the all-Republican committee’s final gift to Georgia Power.
“It would be a slap in the face for the council to rush through this proposal and give the utility everything it wants,” McCorkle said. “It’s just not listening to what people have to say loud and clear.”
80% of new capacity is used in data centers
Georgia Power, which has 2.8 million customers, expects the largest percentage increase in electricity demand over the next five years of any region except Texas. That’s according to an analysis by electricity consultant Grid Strategies of forecasts submitted to federal officials. The utility said it needs 10,000 megawatts of new capacity, enough to power 4 million Georgia homes, and said 80% of that would power data centers. The commission approved 3,000 megawatts of generation in 2024 after Georgia Power made an unusual interim request.
Whether the forecast is accurate and who pays the bill if the data center customer doesn’t materialize is at the heart of the decision. Commissioners in January adopted rules aimed at ensuring data centers cover the costs of building new power plants and transmission lines needed to do so. But if Georgia Power overbuilds and doesn’t have data centers to pay for, other customers could shoulder those costs.
“The premise of the whole argument is that if we get all these new customers, then we can take the cost and spread it over more people, putting downward pressure on prices,” Hua said. “Well, if you don’t end up actually getting all these customers and you build all this new infrastructure, you might see a situation where your bills are actually going to be higher.”
The final potential cost is unclear because Georgia Power’s estimates are partly a trade secret and the company will not make them public. For example, the $15 billion price tag covers only 80% of the construction costs of the current 10,000 MW request and does not include any borrowing costs that customers will also have to pay. Prices for the 3,000 MW approved in 2024 remain completely confidential. Because of the electricity price freeze, final costs won’t be known until 2028, when commissioners next set electricity prices.
Will customers pay?
Public Service Commission staff who analyzed the request said Georgia Power would need $3.4 billion in additional revenue annually through 2031, which could equal $20 per month for residential customers. The company responded that the claim was “completely incorrect.”
“These customers pay the full cost of services up front, commit to long-term contracts, and provide financial guarantees,” spokesman Matthew Kent said. “This means residential and small business customers are protected from the increased costs associated with these projects.”
Staff recommended that the commission allow Georgia Power to build capacity for new large customers only if Georgia Power signs contracts for capacity starting at 3,100 megawatts and for a total of 7,400 megawatts of capacity signed by March 16. The proposal would also allow the commission to avoid approving some billion-dollar contracts for new natural gas power plants. The cost of such construction has risen sharply, in part because equipment manufacturers struggle to keep up with demand.
The company strongly opposed the proposal, saying it would “severely inhibit” its ability to contract new data centers, harm economic development and reduce opportunities for lower rates.
The company and employees can negotiate a solution before the December 19 vote. McCorkle said any outcome should focus on protecting customers.
“What we don’t want is a form of corporate welfare where individual citizens pay for the benefits of large corporations like Meta and Amazon,” she said.
