Georgia Power's Data Center Plan Sparks Rate Debate

Georgia Power's Ambitious Energy Plan Faces Scrutiny

Georgia Power is at the center of a heated debate as the utility company seeks to significantly expand its energy capacity to accommodate the growing demand from data centers across the state. The proposal, which would add approximately 10,000 megawatts of energy to the grid, has sparked concerns about potential rate increases for residential customers while simultaneously positioning Georgia as a hub for technological advancement.

For context, energy experts note that 10,000 megawatts is enough to power roughly nine million homes—an enormous undertaking that would fundamentally reshape Georgia's energy landscape.

The Proposed Expansion: Meeting Data Center Demand

The request comes as Georgia has become an increasingly attractive location for data centers, with companies eager to take advantage of the state's favorable business climate and infrastructure. Currently, Georgia Power serves more than 73 data centers throughout the state, and the company argues that this expansion is necessary to meet both current and future demands.

"The company needs every resource it requested in this case to meet the energy and capacity needs of its customers to support load growth that benefits all customers," stated Georgia Power in recent testimony filed with the Georgia Public Service Commission (PSC).

The Rate Increase Controversy

The heart of the controversy lies in who will bear the cost of this massive expansion. Earlier this month, the PSC's Public Interest Advocacy (PIA) staff issued a cautionary warning, suggesting that the substantial investment could translate to a $20 monthly increase for residential customers.

"Non-large load customers could experience significant harm if (Georgia Power) were to commit to acquire the resources, and the new load and additional incremental revenues do not materialize," wrote Tom Newsome, Philip Hayet, and Leah Wellborn in testimony on behalf of the PIA staff.

This warning has been met with strong pushback from Georgia Power, which filed rebuttal testimony on the final day allowed for such submissions. "This is flatly incorrect, and staff's testimony provides no rationale for why the company would deviate from its current marginal pricing approach," wrote Kristin W. Curylo, Jeffrey R. Grubb, Brandon Looney, and Francisco Valle in Georgia Power's rebuttal.

Georgia Power's Defense

Georgia Power maintains that its proposal will not impact existing residential rates. The company emphasizes that the new large load customers—primarily data centers—will cover the incremental costs associated with serving them.

"Commission approval of this request will not change residential customers' rates and existing customers will not pay for the costs associate with serving new large load customers because those new large load customers are covering the incremental costs to serve them," the company stated.

Furthermore, Georgia Power highlighted that it has secured commitments from data centers planning or under development in Georgia, with 7,900 megawatts already under contract. The company argues that the additional resources are necessary to maintain reliability and support economic growth.

Current Status and Upcoming Vote

The Georgia Public Service Commission is scheduled to vote on Georgia Power's proposal on December 19, 2025. This decision comes at a pivotal time, as the five-member commission currently consists entirely of Republicans, though two Democrats won election in November and will take office on January 1, 2026.

Meanwhile, Georgia Power has provided some reassurance to residential customers by freezing any rate hikes for a three-year period, extending through 2028. The PIA staff has recommended that the commission reject Georgia Power's full proposal and instead approve the acquisition of 3,125 MW of resources with conditional certification of another 4,298 MWs.

Shrinking Pipeline and Economic Concerns

Recent reports indicate that Georgia Power's pipeline of large load economic development projects has shrunk by 6 gigawatts in the third quarter alone, now totaling 50.9 GW. While the number of commitments from large load customers has grown to 28 (representing 11 GW of total commitments), PSC staff testimony has noted that data centers are "underperforming expectations" due to lower materialization rates, project cancellations, and delays.

"Since the 2023 IRP Update, thirty-three data center projects with 11,332 MW of announced load have been removed from the pipeline, representing ~55% of all project removals, and ~65% of announced load removed," the staff testimony stated.

The PIA staff has urged the commission to consider regulatory approaches used in other states, such as Kentucky Utilities/Louisville Gas and Electric, which require executed electric service agreements as a condition for cost recovery of proposed power plants.

Broader Implications

The outcome of this vote will have far-reaching implications for Georgia's economy and energy infrastructure. Georgia Power has warned that rejection of its energy boost proposal could "significantly inhibit" its ability to contract with new large load customers, potentially stifling economic development growth in the state.

As Georgia continues to position itself as a leader in the data center industry, balancing the need for energy expansion with protecting residential customers from rate increases remains a delicate challenge that the Georgia Public Service Commission must carefully navigate.

"The company needs every resource it requested in this case to meet the energy and capacity needs of its customers to support load growth that benefits all customers."
- Georgia Power testimony

Looking Ahead

Regardless of the commission's decision, the debate surrounding Georgia Power's expansion plan highlights the complex interplay between technological advancement, economic development, and utility regulation. As data centers continue to reshape energy demands across the country, utilities and regulators will need to find innovative solutions that accommodate growth while ensuring affordability and reliability for all customers.