ATLANTA (AP) — As data centers in Georgia flood, utility regulators face a big decision: Should they let Georgia Power Co. spend more than $15 billion over the next six years to increase its power capacity by 50% over the next six years to serve computer complexes? Or could the utility overbuild and stick other ratepayers with the bill?
It will be one of America’s largest build-outs to meet the insatiable electricity demand from developers of artificial intelligence. Atlanta-based Southern Company’s largest subsidiary, Georgia Power, said in testimony filed last month that the construction will 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 amount of client load with signed contracts or advanced discussions, it is important to continue to move forward with support for this large growth opportunity,” company officials said in testimony.
But electricity bills have emerged as a powerful political issue in Georgia and nationwide, with grassroots opposition to data centers based in part on fears that other customers will subsidize the technology behemoths’ electricity demands.
“I think what’s happening in Georgia is in some ways a perfect microcosm of what’s happening nationwide,” said Charles Hua, executive director of Powerlines, a nonprofit group that seeks to increase public involvement in utility regulation. “You’re seeing electricity demand rise at the fastest rate in decades, and you’re seeing electricity prices rise at the fastest rate in decades.”
A growing political issue
Electricity costs were a major issue in last month’s elections for governor in New Jersey and Virginia, both data center hot spots. In North Carolina on Tuesday, Democratic Gov. Josh Stein cited concerns about data centers as one reason for opposing a 15% rate increase sought by Duke Energy for the two utilities.
In Georgia, the five Republicans elected to the Public Service Commission will decide on the Georgia Power proposal weeks after voters rebuked GOP leadership, ousting two incumbent Republicans on the panel by a landslide in favor of Democrats. Those two Democrats won in a campaign that focused on the six Georgia Power rates commissioners have allowed in recent years, even though the company agreed in July to a three-year rate freeze.
After hearings next week, commissioners are scheduled to take a final vote on Dec. 19. The two new Democrats don’t take office until January, and the current commissioners rejected requests from opponents to delay a decision until then.
Brionte McCorkley of Georgia Conservation Voters, a group that advocates for carbon-free energy and supports Democrats, fears the vote could be the ultimate gift to Georgia Power from an all-Republican commission.
“It would be a slap in the face for the commission to rush this proposal and give everything to the power company,” McCork said, “just not listening to what the public has said loud and clear.”
80% of new capacity for data centers
Georgia Power, with 2.8 million customers, projects the largest percentage increase in electricity demand over the next five years of any region except Texas. That’s according to an analysis by Power Advisory Grid Strategies of forecasts filed with federal authorities. The utility says it needs 10,000 megawatts of new capacity — enough to power 4 million homes in Georgia — to power 80% of data centers. That’s in addition to the 3,000 megawatts the commission approved in 2024 after an unusual mid-cycle request by Georgia Power.
At the heart of the decision is whether the forecast is accurate and who will foot the bill if data center customers don’t materialize. Commissioners in January adopted rules meant to ensure data centers pay the cost of building new power plants and the transmission lines they need. But if Georgia Power overbuilds and has no data centers to pay for, other customers could bear those costs.
“The whole logic is based on the idea that if we get all these new customers, we can take the costs and spread it over more people and therefore bring down the price,” Hua said. “Well, if you can’t actually get all those customers and you build all this new infrastructure, you could see a scenario where you actually drive bills through the roof.”
Final potential costs are unknown because Georgia Power’s estimates are partly a trade secret that the company does not release. For example, the $15 billion price tag only covers construction costs for 80% of the current 10,000 MW request, and does not include any borrowing costs, which customers must also pay. The price of 3,000 MW approved in 2024 has been kept completely confidential. Because of the rate freeze, the final costs won’t be clear until 2028, the next time commissioners set electric rates.
Do customers pay?
Public Service Commission staff members who analyzed the request say Georgia Power needs $3.4 billion a year in additional revenue through 2031, which could equate to $20 a month for a residential customer. The company responded that such a claim was “patently false”.
“These customers pay the full costs of their services upfront, commit to long-term contracts, and provide financial guarantees,” said spokesman Matthew Kent. “This means residential and small business customers are protected from the cost increases associated with these projects.”
Staff members recommended that the commission allow Georgia Power to build capacity for new large customers only after contracts for 3,100 megawatts of capacity and up to 7,400 megawatts are signed by March 16. That recommendation would allow the commission to avoid approving contracts for some multibillion-dollar natural energy plants. The cost of such manufacturing has risen sharply, partly because equipment manufacturers are having trouble keeping up with demand.
The company pushed back against that recommendation, saying it would “significantly impede” its ability to sign up new data centers, hurt economic growth, and reduce the opportunity to lower rates.
Companies and employees can reach a deal before the Dec. 19 vote. McCork said any outcome must focus on protecting customers.
“What we don’t want is a form of corporate welfare, where individual citizens are paying for the benefits of big mega-corporations like Meta and Amazon,” she said.
