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Georgia Power's Data Center Gamble: Rate Hikes or Empty Promises?

The Data Center Mirage

Georgia Power is facing a crucial decision, one that could leave residential customers footing the bill for a data center boom that might never fully materialize. The Georgia Public Service Commission (PSC) is currently weighing a proposal that would see Georgia Power add a staggering 10,000 megawatts to its power generation fleet over the next five years. The justification? An anticipated surge in demand from data centers, those energy-hungry warehouses powering our digital lives. But the PSC's own staff is sounding the alarm, warning that this buildout is largely speculative.

The core issue is this: Georgia Power claims a growing portfolio of large customers "committed" to receiving 11,000 megawatts of electricity. However, PSC staff analysts point out that only a fraction—around 1,900 MW—is actually backed by signed contracts under the new "large load" billing framework. The rest is based on forecasts that, according to the staff, have historically overestimated data center electricity demand. We're talking about a potential $20-plus increase on monthly residential bills if the PSC approves the full buildout and those data centers don't fully materialize.

This isn't just about Georgia Power's projections; it's about the inherent volatility of the data center market. Data center operators are known for canceling contracts or shifting operations to other states as quickly as they commit to new projects. The PSC staff notes that since the 2023 IRP Update, 33 data center projects, representing 11,332 MW of announced load, have been removed from the pipeline. That's over half of all project removals. So, are we building power plants based on a house of cards?

The Shifting Sands of "Commitment"

Georgia Power insists that the demand is real, citing "large load customer commitments and additional organic growth." But what exactly constitutes a "commitment" in this context? Is it a signed contract with financial penalties for backing out? Or is it a handshake agreement based on projected growth? The details matter, and Georgia Power hasn't been entirely transparent about the nature of these commitments.

The utility's pipeline of large load economic development projects shrank a net 6 GW from Q2 to Q3 2025, landing at 50.9 GW due to projects exiting. Georgia Power’s large load pipeline shrinks by 6 GW New projects entering added only 6.8 GW, with existing projects increasing load by just 1.6 GW. While the total number of commitments increased from 26 to 28 (adding 2.2 GW), the shrinking pipeline raises serious questions about the long-term viability of this data center-driven expansion.

I've looked at hundreds of these filings, and the discrepancy between "announced load" and "contracted load" is a recurring theme. It's like a tech company announcing a new product with a million pre-orders, but only a thousand people actually put down a deposit. The hype is there, but the real demand is far less certain.

And this is the part of the report that I find genuinely puzzling: even though the total and large load economic development pipelines have shrunk, the number of commitments to Georgia Power for electric service from large load customers have grown from 26 to 28. How can the overall pipeline shrink, yet commitments increase? Are smaller data centers stepping up, or are we seeing some creative accounting?

The Political Calculation

The timing of this decision is also critical. The PSC is set to vote on the proposal on December 19th, just days before two newly elected Democratic commissioners take office. The outgoing commissioners, including two who recently lost their re-election bids amid rising utility bill concerns, will have the final say.

This raises questions about the political motivations at play. Are these commissioners prioritizing the long-term interests of Georgia ratepayers, or are they rushing through a decision that could benefit Georgia Power at the expense of its customers? The staff recommends approving only about a third of the proposed new power plants and batteries, a far more cautious approach.

Georgia Power argues that it has options if the data center demand doesn't materialize, such as adding new contracts or delaying construction. But the PSC staff isn't buying it, arguing that existing safeguards aren't enough to protect customers from shouldering the costs of overbuilding. Most contracts with data centers were signed before the new "large load" billing rules took effect, leaving a significant portion of the risk on the shoulders of residential customers.

Ratepayers on the Hook?

Georgia Power stands to profit handsomely from this expansion, nearly doubling its "rate base," which is a key factor in determining its earnings. The PSC staff warns that the utility will likely try to charge customers for a wide range of costs, even if the data centers aren't built. It's a classic case of heads they win, tails you lose, for Georgia Power customers. The company wants to add 10,000 megawatts. To be more exact, 9,700.

So, what's the solution? The PSC staff recommends a more measured approach, approving only a third of the proposed buildout and adding conditions to the approval of another 4,200 megawatts. This would allow Georgia Power to meet the immediate demand while mitigating the risk of overbuilding. But ultimately, the decision rests with the PSC, and the future of Georgia Power's rates hangs in the balance.

A Calculated Bet Gone Wrong?

The data paints a clear picture: Georgia Power's data center gamble is far riskier than the company is letting on. The potential for stranded costs and rate hikes is real, and the PSC needs to proceed with extreme caution. The question isn't just whether Georgia Power can attract enough data centers; it's whether Georgia ratepayers should be forced to subsidize a speculative venture. The numbers suggest they shouldn't.