State PSC poised to hear Georgia Power’s plan to increase fossil fuel use to power data centers

Every time Georgia Power builds a new gas plant, it gets to fully recover the cost of that construction from customers, and then some. John McCosh/Georgia Recorder

Environmental and consumer groups are urging state regulators not to approve Georgia Power’s plans to increase its use of fossil fuels to meet a rapidly growing industrial demand.

Georgia Power and the Public Service Commission staff reached a tentative agreement last week that several clean energy and consumer advocacy groups contend skirt an important regulatory process while failing to adequately protect ratepayers from more expensive electric bills. The state’s largest electricity supplier says it is seeking to amend its 2022 resource plan in a way that temporarily reduces the cost of electricity for its residential customers as it builds new natural gas and oil generators and solar battery storage facilities.

Georgia Power executives have testified that the terms outlined in their stipulated agreement would allow them to provide the reliable utility service needed to handle the forecasted economic growth spurred by large industrial projects being built across the state.

The company officials specifically noted that new data centers will consume a large amount of electricity over the next decade. The amount of power it’ll take to operate data centers is projected to double from 2022 to 2030 as a result of the growing demand for artificial intelligence, according to a January report released by commercial property consultancy Newmark.

“The capacity resources we are requesting… will ensure that we can continue to serve our existing and growing customer base with the reliability our customers value and expect,” Aaron Abramovitz, Georgia Power’s chief financial officer, said at Wednesday’s PSC hearing.

Several consumer and environmental organizations have been critical that the proposed settlement was released shortly after the final public hearing in the case had begun on Wednesday. They are urging people to voice their concerns about the energy plan before the five-member PSC is set to vote on April 16.

Kimberly Scott, executive director of Georgia WAND, a nonprofit focused on environmental justice, said that the tentative deal shouldn’t have been agreed to while a critical PSC hearing featuring expert testimony was underway. 

A fairer process would have been for Georgia Power, the PSC, and other interested parties to negotiate a deal after last week’s hearing, she said.

“At least you should have followed due process and after the (PSC) hearing, then meet with intervenors to come up with solutions that would be equitable,” Scott said.

Georgia Power officials have argued that they will be able to bring the projects online more rapidly if it can execute deals by avoiding a lengthy bidding process. Critics argue that bypassing the normal competitive bidding process could result in higher construction costs.

Georgia Power is pledging to reduce the typical household’s monthly bill by $2.89 over three years, while it serves its growing industrial  and commercial customer base. In October, the company filed an updated request, citing a 17-fold increase in its forecasted energy demands over what the utility company anticipated in 2022.

As proposed, Georgia Power would not charge its customers in 2024 and 2025 if it is unable to resell excess power purchased from Mississippi and Florida power plants.

The company says it will not ask customers to cover any cost overruns while building the three turbines at the natural gas-fueled Plant Yates. However, Georgia Power could return to ask the PSC for permission to recoup costs it considers to be incurred beyond the company’s reasonable control.

The companies would allow outside companies to place bids for constructing a 500 megawatt solar and battery storage facility scheduled to open by the end of 2027. Georgia Power would also build, own and operate another 500 megawatt solar projects at Georgia’s Robins and Moody air force bases.

Scott said that if the PSC approves the stipulated agreement as it stands, it will extend the lifeline of other fossil fuel-burning plants, which will continue to pose an environmental risk to Georgians. 

Analysis by the Southern Environmental Law Center, on behalf of the nonprofit Georgia Interfaith Power and Light, shows that the company’s most likely energy demand can be met with renewable energy options, like solar and battery storage. The SELC said that Georgia’s Power’s request greatly exceeds the company’s own projections.

The center’s senior attorney Jennifer Whitfield said the proposed terms outlined in the agreement are disappointing for the prospects of Georgia Power customers who could face more electricity bill sticker shock.  The average Georgia Power household will likely be paying about $40 more on their electric bills over the last couple of years by the time the price hike is set to kick in 2025.

“This is a fossil fuel bonanza that skips the regulatory processes in place to protect bill payers,” she said. “Not only is expanding dirty, and unpredictably priced fossil fuels on the table, this agreement would allow Georgia Power to bypass important steps to protect its customers from rising energy bills. We have very serious questions about the precedent this creates.”

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