Georgia Power says it needs a huge increase in power capacity to meet data center demand

Georgia Power’s $15 Billion Data Center Gamble Faces Scrutiny Amid Rising Electricity Costs

Georgia regulators are grappling with a momentous decision as data centers flood into the state: whether to approve Georgia Power’s ambitious plan to increase its electricity capacity by 50% over the next six years at a cost exceeding $15 billion. The proposal represents one of the largest utility expansions in the United States designed to meet the growing power demands of artificial intelligence infrastructure.

The Atlanta-based utility, the largest subsidiary of Southern Co., argues that the massive build-out will boost Georgia’s economy and strengthen America’s position in the global AI race. In testimony filed last month, company officials emphasized the urgency of their request, stating, “Given the number of companies interested in doing business in Georgia and the amount of customer load with signed contracts or in advanced discussions, it is important to continue moving forward with support for this great growth opportunity.”

The utility projects needing 10,000 megawatts of new capacity—enough to power approximately 4 million Georgia homes—with 80% dedicated to data centers. This comes on top of 3,000 megawatts the commission already approved earlier this year through an unusual mid-cycle request.

However, electricity costs have emerged as a contentious political issue in Georgia and across the nation. Grassroots opposition to data centers has grown, fueled by concerns that residential and small business customers will end up subsidizing power demands for tech giants like Meta and Amazon.

“I think what’s happening in Georgia is in some sense a perfect microcosm of what’s happening nationwide,” said Charles Hua, executive director of Powerlines, a nonprofit advocating for greater public involvement in utility regulation. “You’re seeing electricity demand grow at the fastest rate in decades, and you’re seeing electricity prices rise at the fastest rate in decades.”

The political landscape surrounding electricity costs has already shifted dramatically. In November’s elections, Georgia voters ousted two Republican Public Service Commission incumbents in favor of Democrats who campaigned against the six rate increases commissioners had approved for Georgia Power in recent years. Similar concerns about utility rates influenced gubernatorial races in New Jersey and Virginia, both data center hotspots. In North Carolina, Democratic Governor Josh Stein recently cited data center concerns as one reason for opposing a 15% rate increase sought by Duke Energy.

Despite the electoral rebuke, the current all-Republican commission in Georgia denied requests to postpone their decision until the newly elected Democrats take office in January. After hearings next week, a final vote is scheduled for December 19.

Brionte McCorkle of Georgia Conservation Voters fears the timing is intentional: “It would be a slap in the face for the commission to rush through this proposal, and give the power company everything it wants. It’s just not listening to what the people have said loud and clear.”

At the heart of the debate lies a critical question: What happens if Georgia Power overbuilds capacity and data center customers don’t materialize as projected? While the commission adopted rules in January intended to ensure data centers pay for their infrastructure needs, critics worry that if demand falls short, other customers will shoulder the burden.

“The whole argument is premised on the idea that if we get all these new customers, then we can take costs and spread it out over more people and therefore put downward pressure on prices,” Hua explained. “Well, if you don’t actually end up getting all those customers and you built all this new infrastructure, then you could see a scenario where you actually drive bills through the roof even more.”

Adding to the controversy is the lack of transparency regarding costs. The $15 billion estimate only covers construction for 80% of the 10,000 megawatt request and excludes borrowing costs, which customers must also pay. The cost of the previously approved 3,000 megawatts remains entirely confidential. Due to a three-year rate freeze Georgia Power agreed to in July, the full financial impact won’t become clear until 2028.

Commission staff analysts estimate Georgia Power will need $3.4 billion in additional annual revenue by 2031, potentially increasing residential bills by $20 monthly. The utility disputes this projection, with spokesperson Matthew Kent insisting, “These customers pay upfront the full costs of serving them, commit to long-term contracts, and provide financial guarantees. That means residential and small business customers are protected from cost increases tied to these projects.”

Staff have recommended a more cautious approach, suggesting the commission only approve capacity for customers with signed contracts, starting with 3,100 megawatts and capping at 7,400 megawatts for contracts signed by March 16. Georgia Power strongly opposes this limitation, claiming it would significantly inhibit economic development opportunities and reduce chances to lower rates.

As negotiations continue before the December vote, McCorkle emphasized that consumer protection should remain paramount: “What we don’t want is a form of corporate welfare, where individual citizens are paying for the benefit of big mega corporations.”