State utility regulators voted Tuesday to allow Georgia Power to add huge amounts of new fossil-fueled power assets and battery storage, mostly to serve the onslaught of energy-intensive data centers and industrial customers heading to Georgia.
Georgia Power says serving those large electricity users will put “downward pressure” on rates paid by other customers, many of whom have been dealt four commission-approved rate increases since 2023 — with two more expected to kick in by early next year. But critics say the protections against further rate hikes are threadbare and that allowing the company to lock in more fossil fuel reliance while skirting the normal competitive bidding process is risky for consumers — and the climate.
The electricity generation additions were greenlit by four of the five elected members of the Georgia Public Service Commission (PSC). All are Republicans.
Chairman Jason Shaw, Vice-chairman Tim Echols and Commissioners Fitz Johnson and Tricia Pridemore voted “yes.” Commissioner Lauren “Bubba” McDonald abstained from voting, after a motion he proposed to delay certification of Georgia Power’s new fossil fuel-burning units until after the 2024 presidential election failed to pass.
The plan the commissioners signed off on is identical to the terms outlined in a settlement that Georgia Power, Georgia Public Service Commission (PSC) staff, and some manufacturing and clean energy groups reached in late March.
Shaw said he felt the deal balanced the need to keep electricity costs down while enabling Georgia Power to meet a wave of demand.
“Nobody got everything they wanted, but I think it’s a good outcome.”
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
In a statement, Georgia Power’s chief financial officer Aaron Abramovitz said,” approval of this agreement will preserve and protect the reliability and quality of electric service our customers expect and supports the continued economic development of our state ...”
The commission’s vote comes after Georgia Power filed a surprise, off-year request last fall to add more electricity assets to its system. The company typically submits long-range energy plans to regulators on three-year cycles and the next one wasn’t scheduled until 2025.
But in October, the company said its new projections showed it could face an electricity shortfall as soon as the winter of 2025/2026. Georgia Power executives said some of the expected load growth was from electric vehicle factories and other industrial customers, but attributed more than 80% to the influx of data centers.
In March, Georgia lawmakers approved a bill to suspend sales tax breaks on new data centers, but Gov. Brian Kemp has not yet signed the measure into law. In the meantime, the facilities are continuing to proliferate in Georgia. Earlier this month, tech giant Microsoft purchased 136 acres in south Fulton County, where it plans to build yet another data center complex.
The company had sought to add almost 3,400 megawatts (MW) of new assets to its system, more than three times the output of one of Plant Vogtle’s new nuclear reactors. That included requests to build three oil-and-gas-fired units at Plant Yates in Coweta County, develop 1,000 MW of battery storage and continue to buy electricity from a gas plant in Florida and its corporate cousin, Mississippi Power.
Credit: undefined
Credit: undefined
Ultimately, the PSC voted to give Georgia Power most of what it wanted.
The commission gave the company the all-clear to continue building the new units at Plant Yates, without evaluating other options to secure the 1,400 MW they’ll provide. Of the 1,000 MW of battery storage Georgia Power sought, the company will get to own and operate at least 500 MW, including two installations at Robins and Moody Air Force bases. For the other 500 MW of batteries, the utility will need to solicit bids and the commission can decide later how much to approve.
The out-of-state power purchases were also cleared to continue. Georgia Power’s agreement to buy electricity from Mississippi Power will keep a coal-fired power plant open that had been slated to close.
In return, the company has pledged to use the bump in revenue it expects to trim $2.89 from the monthly bills paid by the average residential customer. As of January, the average Georgia Power customer using 1,000 kilowatt-hours of electricity a month was paying roughly $156 a month for electricity.
Georgia Power’s residential customers — the company’s largest group — have already faced a series of commission-approved rate hikes that will ultimately increase the typical residential customer’s bill by about $38 per month. That doesn’t include another rate increase that will start in 2025, the exact amount of which is still to be determined.
But the $2.89 decrease will only last three years, starting in 2026, and is not guaranteed to materialize.
Before the reductions would even take effect, Georgia Power will file another long-range energy plan and a separate request to adjust rates next year. Depending on what the company asks for and what the commission approves, it’s possible the cuts promised in this case could be nullified.
After the vote, Commissioner Johnson — who could face a reelection fight next year — warned Georgia Power and its attorneys not to ask for more rate increases again next year.
“Our ratepayers cannot continue to see rate hikes,” Johnson said. “That message needs to go back (to Georgia Power leadership) loud and clear.”
Still, several groups criticized the PSC for approving the plan, arguing that allowing the company to add electricity assets without evaluating whether more cost-effective options are available on the market guts important consumer protections.
“Georgians pay some of the highest energy bills in the country, and they keep climbing,” said Codi Norred, executive director of Georgia Interfaith Power and Light (GIPL), which is represented by the Southern Environmental Law Center at the commission. “It is the PSC’s duty to meaningfully protect Georgians’ health and wallets, and they failed to do that today.”
The planet, meanwhile, has endured 10-straight months of record-breaking heat. Environmentalists say allowing Georgia Power to burn more fossil fuels will only accelerate the dangerous rise in global temperatures.
Gas-fired units, like those under construction at Plant Yates, are especially troubling to climate advocates, because natural gas infrastructure releases the hyper-potent, heat-trapping gas methane. Adding to the concern, critics say, is that oil and gas prices have fluctuated wildly in recent years amid supply chain issues and geopolitical unrest. Those price spikes could show up in the form of higher electricity bills, warned Bryan Jacob, the solar program director at the Southern Alliance for Clean Energy.
“Fossil gas prices may be low now, and that may have lulled the staff and/or commission into a state of complacency,” Jacob said. “But rest assured, fossil gas prices are volatile and they will go up again.”
A note of disclosure
This coverage is supported by a partnership with Green South Foundation and Journalism Funding Partners. You can learn more and support our climate reporting by donating at ajc.com/donate/climate/
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