ATLANTA (AP) — With data centers flooding Georgia, utility regulators face a big decision: Should Georgia Power Co. spend more than $15 billion to increase its electricity capacity by 50% over the next six years to service the computer complexes? Or could the utility overcharge and stick other ratepayers with the bill?
It would be one of the largest constructions in the US to meet the insatiable demand for electricity from artificial intelligence developers. Atlanta-based Southern Co.’s largest subsidiary, Georgia Power, said in testimony 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 customers with signed contracts or in advanced discussions, it is important that we continue to move forward with support for this great growth opportunity,” company officials said in testimony.
But power bills have emerged as a strong political issue in Georgia and nationally, with grassroots opposition to data centers based in part on fears that other customers will subsidize the tech giants’ energy demands.
“I think what’s happening in Georgia is in some ways a perfect microcosm of what’s happening nationally,” said Charles Hua, executive director of Powerlines, a nonprofit group that seeks to increase public involvement in utility regulation. “You see electricity demand growing at the fastest pace in decades and you see electricity prices rising at the fastest pace in decades.”
A growing political issue
Electricity costs were a key issue in last month’s gubernatorial elections in New Jersey and Virginia, both data center hotspots. In North Carolina on Tuesday, Democratic Gov. Josh Stein cited data center concerns as a reason to oppose a 15 percent rate increase requested by Duke Energy for two utilities.
In Georgia, the five Republicans elected to the Public Service Commission will decide on the Georgia Power proposal weeks after voters delivered a stinging rebuke to GOP leadership, ousting two incumbent Republicans from the panel in favor of Democrats by overwhelming margins. The two Democrats won in campaigns that focused on six Georgia Power rate increases that commissioners have allowed in recent years, even as the company agreed to a three-year rate freeze in July.
After hearings next week, commissioners are scheduled to take a final vote on Dec. 19. The two New Democrats won’t take office until January, and the current commissioners rejected opponents’ request to delay the decision until then.
Brionte McCorkle of Georgia Conservation Voters, a carbon-free energy group that has backed Democrats, fears the vote will be a final gift from the all-Republican committee to Georgia Power.
“It would be a slap in the face for the commission to rush through this proposal and give the power company everything it wants,” McCorkle said. “They just don’t listen to what people have 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 of forecasts submitted to federal officials by energy consultant Grid Strategies. The utility says it needs 10,000 megawatts of new capacity — enough to power 4 million Georgia homes — saying 80 percent of that would power data centers. That’s on top of the 3,000 megawatts the commission approved in 2024 after an unusual mid-cycle request from 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. In January, commissioners passed rules designed to ensure data centers pay the costs of building the new power plants and transmission lines they need. But if Georgia Power overbuilds and there are no data centers to pay for, other customers could bear those costs.
“The whole argument is based on the idea that if we get all these new customers, then we can take the costs and spread them over more people and therefore put downward pressure on prices,” Hua said. “Well, if you don’t actually end up getting all these customers and you’ve built all this new infrastructure, then you could see a scenario where you’re actually going to drive your bills through the roof even more.”
The final potential costs are not known because Georgia Power’s estimates are partly a trade secret that the company will not divulge. For example, the $15 billion price tag only covers construction costs for 80 percent of the current 10,000 megawatts of demand and doesn’t include any of the borrowing costs, which customers also have to pay. The price of the 3,000 megawatts approved in 2024 remains entirely secret. Because of the rate freeze, the final costs won’t become clear until 2028, the next time commissioners set electricity rates.
Will customers pay?
Public Service Commission staff members who reviewed the request say Georgia Power would need $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 “categorically incorrect”.
“These customers pay all costs for their service 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 they sign contracts starting with 3,100 megawatts of capacity and up to 7,400 megawatts total for contracts signed by March 16. Costs for such construction have skyrocketed, in part because equipment manufacturers are having trouble keeping up with demand.
The company pushed back against that recommendation, saying it would “significantly inhibit” its ability to sign up new data centers, hurt economic development and reduce the opportunity to lower rates.
The company and staff could negotiate a deal before the Dec. 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 benefit of big mega-corporations like Meta and Amazon,” she said.