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New data centers built in Georgia will have to pay more for electricity from Georgia Power under a change designed to protect residents and businesses from higher energy bills. But consumer advocates still have concerns about the booming business.
Data centers — basically buildings full of computer servers that enable everything online, from email to AI — use an enormous amount of energy. They use so much that last year, Georgia Power got permission to build three new gas-powered turbines largely to meet their needs.
The utility is widely expected to ask for permission to build and buy even more new electricity generation when it submits its long-term plan to state regulators later this week.
Amid this rush to supply more power for the growing industry, regulators and consumer advocates had worried that smaller energy users could end up shouldering some of the costs for new turbines and other costly power infrastructure upgrades.
The data center boom is happening in the midst of a series of bill increases for Georgia Power customers. Over the last three years, rates have increased five times to cover the costs in the utility’s last long-term plan and the costs of building new nuclear reactors at Plant Vogtle. Bills also went up to cover high costs for the fuel that powers gas turbines and coal plants.
So earlier in January, the Georgia Public Service Commission approved new rules meant to prevent the costs from being passed on to others.
“The number one goal for us is to protect the other ratepayers, primarily the residential and small business class ratepayers, to ensure there’s not any cost shifts that are occurring,” said commission chair Jason Shaw.
Under the new terms, Georgia Power will set a minimum monthly bill for new customers using 100 megawatts or more — equivalent to the average power use of about 50,000 homes, or nearly 10 percent of what each of the new reactors at Plant Vogtle can generate — to ensure the large customers are the ones paying for any upgrades needed to meet their energy needs.
The commission also extended contract terms from five years to 15. Technology changes quickly, Shaw pointed out, and he’s worried that data centers built tomorrow could close or relocate in a few years if their equipment becomes obsolete.
“What if these customers up and leave? That’s what our fear is,” he said. “And that’s why you need longer term provisions to be able to basically lock them in for a longer period of time to recoup all of your cost.”
It’s too soon to tell if the changes will work, according to Liz Coyle of consumer advocacy group Georgia Watch. The rules also only apply to Georgia Power since it’s the only electric utility the commission regulates; municipal utilities and electric membership cooperatives, which are common in rural parts of the state, won’t have these same protections.
Coyle said that means lawmakers should look at this issue too.
“I hope they’re also thinking about, all right, what about the possibility of these large electricity users and water users locating outside of Georgia Power territory and not choosing Georgia Power as their provider,” she said. “What does the legislature need to do to protect people in those circumstances?”
A special subcommittee has been formed in the state House to look at Georgia’s energy and water resources for major economic development projects like data centers.
The Public Service Commission, Georgia Power and advocates like Coyle will also spend much of this year hashing out how exactly the state’s largest utility makes its energy and how much customers pay. The utility’s long-term energy plan, known as an integrated resource plan, is due to the commission this week. Once the plan is finalized, the utility will set rates for the next three years, which the commission also has final say over.
