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.”
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