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Data centers are flooded GeorgiaUtility regulators face a big decision: Should they let Georgia Power Co. spend more than $15 billion to expand its power capacity by 50% over the next six years to serve the computer complex? Or could the utility overbuild and stick other ratepayers with the bill?
It will be one of the largest built in the US to meet the insatiable power demand of artificial intelligence developers. Atlanta-based Southern Co.’s largest subsidiary, Georgia Power, said in testimony filed last month that the build-out 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 amount of client load with signed contracts or advanced discussions, it is important to continue to move forward with support for this great growth opportunity,” company officials said in the testimony.
But as power bills have emerged as a powerful political issue in Georgia and across the country, grassroots opposition to data centers is based partly on the fear that other customers will subsidize the technology giants’ power demands.
“I think what’s happening in Georgia is in some ways a perfect microcosm of what’s happening across the country,” said Charles Hua, executive director of Powerlines, a nonprofit group that seeks to increase public involvement in utility regulation. “You’re seeing electricity demand increasing at the fastest rate in decades, and you’re seeing electricity prices increasing at the fastest rate in decades.”
a growing political issue
The cost of electricity was a major issue in the election for the post of governor last month new Jersey And VirginiaBoth data center hot spots. In North Carolina on Tuesday, Democratic Governor Josh Stein cited concerns about data centers as a reason to oppose a 15% rate increase sought by Duke Energy for the two utilities.
In Georgia, five were elected republican The Public Service Commission will decide on Georgia Power’s proposal just weeks after voters delivered a stinging rebuke to GOP leadership and ousted the panel’s two sitting Republicans by a landslide in favor of the Democrat. Those two Democrats won in campaigns that focused on six Georgia Power rate increases in recent years that commissioners allowed, even after the company agreed in July to a three-year rate freeze.
After a hearing next week, commissioners are scheduled to cast a final vote Dec. 19. The two new Democrats will not take office until January and the current commissioners have rejected opponents’ request to postpone the decision until then.
Briante McCorkle of Georgia Conservation Voters, a group that advocates carbon-free energy and supports Democrats, fears the vote will be one last gift from the all-Republican commission to Georgia Power.
McCorkle said, “It would be a slap in the face to the commission to rush through this proposal and give the power company everything it wants.”
80% new capacity for data centers
Georgia Power, with 2.8 million customers, is projecting 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 filed with federal authorities. The utility says it needs 10,000 megawatts of new capacity – enough to power 4 million Georgia homes – adding that 80% of that will power data centers. This is in addition to the 3,000 megawatts approved by the commission in 2024 following Georgia Power’s unusual mid-cycle request.
Whether the forecast is accurate and who will pay the bill if data center customers are not successful are at the heart of the decision. Commissioners in January adopted rules to ensure that data centers pay the costs of building the new power plants and transmission lines they need. But if Georgia Power overbuilds and has no data centers to pay for, other customers could absorb those costs.
“The whole argument is based on the idea that if we get all these new customers, we can take the cost and spread it to more people and thus put pressure on prices,” Hua said. “Well, if you don’t actually get all those customers and you built all this new infrastructure, you could see a scenario where you actually end up with bills that go up even more.”
The final potential cost is unknown because Georgia Power’s estimates are partly a trade secret that the company will 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 the 3,000 MW approved in 2024 is completely secret. Because the rate is fixed, the final cost will not be clear until 2028, the next time commissioners set electricity rates.
Will customers pay?
Public Service Commission staff members who analyzed the request say Georgia Power would need $3.4 billion a year in additional revenue by 2031, which could equate to $20 a month for a residential customer. The company responded that such a claim was “absolutely false”.
“These customers pay the full cost of their service up front, commit to long-term contracts and are provided financial guarantees,” said spokesman Matthew Kent. “This means that 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 if they sign contracts starting with 3,100 megawatts of capacity and up to a total of 7,400 megawatts by March 16. The recommendation would also allow the Commission to avoid approving contracts for some new multibillion-dollar natural gas-fired power plants. The cost of such manufacturing has increased rapidly, partly because equipment manufacturers are having trouble keeping up with demand.
The company responded sharply against that recommendation, saying it “would significantly hinder its ability to sign on new data centers”, harming economic growth and reducing the opportunity to lower rates.
The company and workers can reach an agreement before the December 19 vote. McCorkle said any outcome should be focused on protecting customers.
He said, “What we don’t want is a form of corporate welfare, where individual citizens are paying for the benefits of big mega corporations like Amazon and Amazon.”