Metro Atlanta is one of the hottest destinations in the country for tech companies to build data centers, hulking warehouses filled with servers that power web services, cryptocurrency transactions and increasingly, artificial intelligence.
But the facilities themselves use huge amounts of electricity, and concern has been growing that their demands could strain the grid and drive up costs for residential customers and other businesses.
On Thursday, the Georgia Public Service Commission approved changes to Georgia Power’s rules and contract provisions commissioners say will make sure data centers pay their fair share and keep other customers from being saddled with their costs.
“The amount of energy these new industries consume is staggering,” PSC Chairman Jason Shaw said in a statement. “By approving this new rule, the PSC is helping ensure that existing Georgia Power customers will be spared additional costs associated with adding these large-load customers to the grid.”
The changes were proposed by Georgia Power in December and apply to new customers that use more than 100 megawatts of electricity.
Credit: arvin.temkar@ajc.com
Credit: arvin.temkar@ajc.com
A single megawatt is enough to power several hundred homes, according to the Nuclear Regulatory Commission. Data centers, which often run 24/7, typically demand well over 100 megawatts of electricity. Some require as much 1,000 megawatts or more to keep their servers humming. That’s roughly equal to the maximum output of one of Plant Vogtle’s two new nuclear reactors.
Already, Georgia Power has been approved to build new oil- and gas-burning units, add massive battery storage systems and buy power from coal and gas plants in other states, largely to meet a wave of data-center demand the company contends is coming.
Those projects, along with building new transmission lines to deliver the power, carry enormous costs, which some fear could be passed on to the company’s other customers, whose rates have shot up dramatically in recent years. Since late 2022, the PSC has approved a series of rate increases that have pushed the average Georgia Power customer’s bill up by about $43, according to data from the company.
The changes greenlit Thursday by the PSC aim to prevent that, the commission said.
The actual rates data centers will pay for electricity did not change. The new rules, however, give Georgia Power latitude to include minimum billing requirements and other terms into its service agreements with customers that use more than 100 megawatts of electricity.
Credit: arvin.temkar@ajc.com
Credit: arvin.temkar@ajc.com
The changes also let the utility charge data centers for “upstream generation, transmission and distribution” costs required to serve them, plus stretch out contract lengths for these facilities from five years to 15 years. The longer contracts are to ensure that if a data center leaves the state after a few years, the cost of infrastructure developed to serve them can be recouped, the company and commission said.
Any contracts Georgia Power signs with customers that will use 100 megawatts or more of electricity will now be subject to PSC oversight, too.
Georgia Power spokesman Jacob Hawkins said in a statement that the changes exemplified the “constructive regulatory environment in Georgia, which protects customers and helps ensure that growth benefits all customers as we plan and meet the needs of new large load customers coming to our state.”
Bob Sherrier, a staff attorney with the Southern Environmental Law Center, called the rules a step in the right direction, but said more changes — like guidelines for the specific costs for which data centers can be charged — are needed.
“If you build a substation on their property, that’s pretty straightforward,” Sherrier said. “But what about the huge new transmission projects that are being built to support them? What about the increased reliance on gas? … What costs are they paying for?”
Those questions could be addressed in the coming months.
Later this week, Georgia Power is set to submit its highly anticipated long-range plan for meeting customers' energy needs. Based on the company’s recent filings, the state’s data center boom is expected to be the driving force behind that proposal.
In Georgia Power’s latest “large load economic development report” filed with the commission in November, the company forecasts demand for its electricity will continue to grow by thousands of megawatts into the 2030s. Most of that demand is from data centers and other energy-hungry facilities.
State legislators may also take action to address the proliferation of data centers.
Last legislative session, the General Assembly passed a bill that would have revoked state tax incentives available to the largest server farms that choose to build in Georgia. But Gov. Brian Kemp vetoed the measure, keeping the tax breaks in place and the pipeline of data centers flowing to Georgia.
House Speaker Jon Burns (R-Newington) has also called for a special committee to convene to explore data center issues. That committee is expected to begin meeting this week.
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