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The Georgia Public Service Commission on Friday approved a controversial plan that will allow the state’s biggest utility to commence one of the largest new fossil-fuel buildouts in the country — a move that critics fear will raise utility bills for most Georgia residents over the coming years.
The last-minute settlement was approved unanimously by the five commissioners, all Republicans. The vote came just weeks before two of those commissioners are set to be replaced by Democrats who won upset victories in the November election by running on the issue of energy affordability.
Back in November, staff at the PSC recommended that the commission allow Georgia Power to build only about one-third of the nearly 10 gigawatts of new gas-fired power plants and batteries the utility had requested. Friday’s decision instead gives it the go-ahead to move forward on building the full total.
The utility has justified that scale by pointing to forecasts of booming electricity demand due to new data-center construction. In recent weeks, however, even Georgia Power has reduced its data-center demand projections. And across the state and the country, concerns are rising that the boom in artificial intelligence that is driving data-center investments may be a bubble about to burst.
That’s why PSC staff deemed the utility’s full buildout plan too risky — and why energy experts and consumer and environmental advocates oppose it. Should Georgia Power build all of that infrastructure while data-center demand fails to materialize, its customers would be forced to pay higher bills for the unnecessary power plants.
“It is a massive financial gamble,” said Jennifer Whitfield, a senior attorney at the Southern Environmental Law Center, one of several groups protesting Georgia Power’s gas-heavy buildout plan. “The bottom line is that we don’t need this much energy based on the data that’s been provided.”
The PSC staff expect the plan to raise average household utility bills by about $20 per month, or possibly more if gas prices rise or data-center demand fails to show up, according to testimony from November. Those costs would be layered on top of six rate hikes since late 2022 that have already increased average residential bills by $43 per month, and which helped propel the two incoming Democratic commissioners to victory in November.
Georgia Power can expect to profit handsomely from the commission’s decision. The utility revealed in a Securities and Exchange Commission filing last week that the plan would allow it to invest $16.3 billion in “company-owned projects” — capital investments on which the utility earns a guaranteed rate of return.
To avoid passing extra costs onto consumers, Georgia Power would need gigawatts’ worth of data centers to be built and to continue buying electricity for decades.
Right now, it’s highly uncertain whether those data centers will ever show up.
“[O]nly a fraction of the requested capacity is backed by data center customers that have signed contracts for electric service, and even less have signed contracts covered by the protections contemplated in the Commission’s new rules and regulations,” the Southern Alliance for Clean Energy and Sierra Club wrote in a briefing filed with the commission. “With no data center customer committed to pay for most of the capacity Georgia Power is requesting for the entirety of the assets’ lifetimes, ratepayers will inevitably be on the hook.”
PSC staff in November testified that only about 3.1 gigawatts of Georgia Power’s buildout should be approved right away, based on the number of data centers that have executed contracts with the utility. It also proposed allowing about 4.3 gigawatts more on condition that additional data centers sign definitive contracts by March 2026.
Indeed, PSC staff’s forecasts of demand growth between now and 2031 were far lower than Georgia Power’s: about 6 gigawatts less under a “lower large-load materialization assumption,” and about 4 gigawatts less under a “greater large-load materialization case.”
Utilities and regulators across the country are struggling to manage similar mismatches between the unprecedented boom in proposed data centers and the increasing uncertainty that those plans will come to fruition.
When the new Democratic commissioners take office next month, it’s unclear whether they’ll be able to adjust the plan or rein in costs.
Foes of the plan are pressing commissioners to use their authority to force Georgia Power to update its load-growth forecasts and report on changing costs for the power plants it plans to build, and to retract approval for spending plans that may no longer be justified by growing demand.
But Whitfield noted that Friday’s vote by the commission authorizes Georgia Power to begin charging customers for the expenses it incurs to build and procure the resources approved by the plan.
“If in the future the commission were to modify its certification order — which it could — Georgia Power would still be able to recover any costs it incurred up to that point,” she said.
It’s also unclear whether the settlement agreement will force Georgia Power to follow through on its public pledges to limit the impact of its data center–driven investments on everyday customers, Whitfield said. Her group filed a motion earlier this week asking the commission to order Georgia Power to provide more information about its plan to use revenue from data centers and other large customers to put “downward pressure” on rates for typical residential customers.
“There are so many loopholes in the financial assurances that staff tried to achieve when it entered into this stipulation,” she said. “The end result is nearly meaningless for a typical Georgia Power customer … The reality is, we just don’t have any reassurance that all of us aren’t going to be on the financial hook for it.”
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