In late 2023 and early 2024, the murmur among data center operators was that the industry would need to start taking steps to improve its energy usage efficiency, not just because it was a financially and ecologically responsible thing to do, but if the industry didn’t start taking that responsibility, the utilities and governmental agencies would do it for them.
In May 2024, that prediction came true when American Electric Power (AEP) of Ohio filed a proposal with the state’s public utility commission (PUC) to create a new rate category for data center customers and cryptocurrency mining/mobile data center operations.
This sent a ripple through the state's data center industry which countered the AEP proposal with one of their own. Faced with major concerns on both sides, a compromise proposal was worked out to be sent back to the PUC for approval.
A Ripple Effect?
For its part, on January 23, 2025, the Georgia Public Service Commission (PSC) unanimously approved a new rule addressing the energy consumption of the state's large-load customers, particularly data centers.
This regulation applies to new Georgia Power customers whose energy usage exceeds 100 megawatts (MW). Under the rule, these customers are required to cover the transmission and distribution costs incurred during their data center's construction.
Additionally, any new contracts between Georgia Power and such large-load customers must be submitted to the PSC for review.
Georgia law requires that the Public Service Commissioners approve all new or amended rules for Georgia Power. And unlike the process we saw take place in Ohio, the PSC, which controls the approval process, is already involved in the decision; it’s not a utility company making the proposed rate change.
PSC Chairman Jason Shaw emphasized the significance of this measure, stating:
The amount of energy these new industries consume is staggering. 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.
This decision comes in response to concerns that the rapid growth of data centers in Georgia could lead to increased electric rates for residential and small business customers.
By implementing this rule, the PSC aims to ensure that the financial responsibilities associated with substantial energy consumption are borne by the large-load customers themselves, thereby protecting other ratepayers from potential cost increases.
PSC Vice Chairman Tim Echols explained:
Our Commission’s action today protects residential and small business customers from data center load financial impacts. We want to keep Georgia the best place to do business, but data centers will need to bear the cost of their electricity acquisition.
The rule also mandates that any new contracts between Georgia Power and large-load customers exceeding 100 MW be submitted to the PSC for review. This provision ensures regulatory oversight and transparency in agreements that could significantly impact the state's power grid and ratepayers.
Commissioner Lauren “Bubba” McDonald points out that this is one of a number of actions that the PSC is planning to protect ratepayers, and that the PSC’s 2025 Integrated Resource Plan will further address data center power usage.
Keeping Ahead of Anticipated Energy Demand
This regulatory change reflects Georgia's proactive approach to managing the increasing energy demands associated with the state's growing data center industry, aiming to balance economic development with the interests of all electricity consumers.
Georgia Power has been trying very hard to develop generation capacity to meet it’s expected usage pattern, but the demand is increasing at an incredible rate.
In their projection for increased energy demand, the 2022 number was 400 MW by 2030. A year later, in their 2023 Integrated Resource Plan, the anticipated increase had grown to 6600 MW by 2030.
Georgia Power recently brought online two new nuclear reactors at the Vogtle Electric Generating Plant, significantly increasing its nuclear generation capacity giving the four unit power generation station a capacity of over 4.5 GW. This development has contributed to a shift in Georgia's energy mix, with clean energy sources surpassing fossil fuels for the first time.
But despite the commitment to nuclear power, the company is also in the process of developing three new power plants at the Yates Steam Generating Plant. According to the AJC newspaper, regulators had approved the construction of fossil fuel power, approving natural gas and oil-fired power plants.
Designed as “peaker” plants to come online at times of increased the demand, the power plants will be able to deliver up to 1.3 GW of power when necessary, or roughly the equivalent of a single one of the four reactors at the Vogtle Nuclear Generation Station.
More details should be available soon, when the 2025 Integrated Resource Plan is released, about Georgia Power’s plan to issue an RFP to directly address capacity needs for 2029 through 2031.
This follows on to the 2024 RFP for 500 MW energy storage systems. The company’s most recent projections for energy demand are looking to add 10 GW of renewable energy by 2035; almost doubling previous projections for 2030.
Getting the Power Where It Is Needed
In October of 2024, Georgia Power was awarded over $160 million from the Department of Energy via the Grid Resilience and Innovation Partnerships (GRIP) program.
Investments under GRIP are targeted at improving the resiliency of the grid and making events such as extreme weather conditions less likely to threaten power delivery.
According to Fran Forehand, Senior Vice President of Transmission for Georgia Power:
We know our customers depend on us to make the investments needed in the state’s power grid to ensure that we provide the energy resilience and reliability they value and expect, while keeping energy prices affordable. Leveraging federal funding and working with the DOE to integrate innovative technology is a great example of how we do this. Thanks to the robust and long-term planning process we have in place with the Georgia Public Service Commission, the investments we’re making in a smarter and more resilient power grid are showing value for our customers during extreme weather events such as Hurricane Helene, and every day.
Conclusion
While data centers are a significant commercial consumer of power from utilities, we now see how utilities' planning is taking into account not just meeting demand via power generation, but also being able to delivery energy reliably, to both commercial and consumer customers.
