Georgia Power to reveal its plan to serve all those power-hungry data centers

Credit: TNS

Credit: TNS

Georgia Power is relying on the sun for more electricity than ever before. Federal forecasters are also projecting solar will be the country’s fasting growing source of new generating capacity over the next two years.

At the same time, Georgia Power and other utilities say a wave of electricity demand from data centers other energy-hungry industries is coming fast. So far, the company has proposed meeting their needs by leaning on oil and gas-fired power plants, along with large batteries and some solar.

Through executive orders, meanwhile, President Donald Trump is attempting to execute a U-turn from former President Joe Biden’s energy policies, announcing plans to yank federal support for renewables and double down on fossil fuels.

“I think this is a hugely significant moment for determining what the energy future of Georgia will look like,” said Jennifer Whitfield, a senior attorney at the Southern Environmental Law Center.

Why is this happening now?

Georgia Power is required to file an IRP with state regulators at the Public Service Commission every three years.

In 2022, the PSC approved a plan for the company to purchase 2,000 megawatts of new natural gas capacity, plus add 2,300 megawatts of solar. For context, the maximum output of one of Plant Vogtle’s new nuclear reactors is just over 1,000 megawatts.

That 2022 road map also laid out plans to shutter nearly all of the company’s coal power plants by 2028, with the exception of units at Plant Bowen near Cartersville.

Then, in late 2023, Georgia Power made a surprising request: The company told the PSC it needed to generate more electricity — and soon — to supply “large load” customers flocking to Georgia. About a year and a half ahead of schedule, the company asked to add thousands of megawatts of new capacity, which its executives testified was overwhelmingly to serve data centers.

The PSC approved most of what Georgia Power wanted, granting permission to build three new oil and gas units in Coweta County without going through the normal competitive bidding process. The PSC also cleared the company to purchase more power from out-of-state gas and coal plants, plus add more battery storage systems and some solar.

Is the demand surge real?

In the months since Georgia Power surprised regulators with a request to add to its fleet, the company’s projections for future electricity demand have continued to climb.

In October 2023, the utility said it had a pipeline of committed customers set to bring 3,300 megawatts of new electricity demand to its system by the mid-2030s. By November 2024, Georgia Power said that number had more than doubled to 8,000 megawatts. The overwhelming majority of the company’s expected load growth comes from data centers.

The increase would be dramatic, but Georgia Power’s past projections have not always proven accurate.

An analysis by The Atlanta Journal-Constitution shows Georgia Power’s winter and summer forecasts have often overestimated actual peak demand for electricity.

Asked about the gulf between projected and actual peak demand, Georgia Power spokesperson Jacob Hawkins said the company plans to use “the best information and forecasts we have available” moving forward.

“When the temperatures hit extreme highs or extreme lows, our customers expect us to be able to serve their homes and businesses,” Hawkins added in a statement. “We do not gamble with our investments and would never ask our customers to accept interruptions in service due to a lack of investment or planning.”

Still, environmental and consumer advocates say overbuilding power plants to serve data centers that might not ultimately come to Georgia puts customers at risk of further rate increases. On the flip side, the utility could benefit — whether projects pan out or not.

Utilities like Georgia Power earn profits on capital costs for building power plants, transmission lines and other infrastructure. Those costs are typically recovered from customers through rates. Since late 2022, Georgia Power customers have faced a slew of PSC-approved rate increases that have pushed the average customer’s bill up by about $43, according to company data.

“Georgia Power doesn’t have a lot of skin in the game when it comes to building too much … while residential customers are guaranteed a big bill,” said Whitfield, the SELC senior attorney.

Recent developments have added uncertainty to the rush to expand power supplies for data centers, especially ones that support artificial intelligence.

Just this week, the Chinese AI startup DeepSeek stunned competitors and shook global markets with claims that its new chatbot was developed with a fraction of the computing power and cost of other models. Questions remain about the company’s breakthrough, but some experts have said it could upend conventional wisdom about AI‘s seemingly insatiable electricity needs.

Matthew Oliver, an associate professor and energy economist at Georgia Tech, said overbuilding is a concern, but so are electricity shortfalls.

“Nobody likes power outages,” Oliver said. “And if (Georgia Power) had to implement rolling blackouts because of insufficient generating capacity, you can bet people would be furious about it.”

Coal clings to life

Hawkins, the Georgia Power spokesperson, said he could not share details about the company’s energy plans until they have been submitted to the PSC.

But past cases and statements shed light on the direction the company could go.

In Georgia Power’s last regularly scheduled energy planning case in 2022, the company seemed ready to phase out coal, with executives calling its remaining plants “uneconomical.” In 2023, coal made up just 16% of the utility’s energy mix, down from 67% a decade and a half prior.

But lately, Georgia Power has left the door cracked to keeping some coal plants running longer. In its 2023 IRP, the company said it might keep Plant Scherer near Macon running beyond its planned closure date in 2028.

Based on the company’s 2023 IRP request, more gas is also possible. Earth just endured its hottest year on record, so any new investments in fossil fuels would lock in for years to come more of the greenhouse gas emissions that are causing the planet to warm.

Georgia Power’s gas investments have been driven in part by data centers, which require around-the-clock power. Other utilities are adding gas units, too.

But there are other options — like solar paired with battery storage systems — that environmentalists favor and experts say can serve electricity-gobbling data centers.

With the help of batteries, excess solar power generated when the sun is shining can be stored for use later when demand spikes, turning an intermittent source of power into a constant one.

Credit: NATRICE MILLER

Credit: NATRICE MILLER

Oliver, the Georgia Tech professor, agrees battery storage is a key part of the equation.

“We can now do solar at very low cost, but if it’s going to provide power 24-7, it has to be accompanied by storage,” he said.

It’s also possible the company begins allowing data centers to bring their own power supplies.

Georgia Power inked a deal in 2023 with a group representing major energy users seeking clean energy to develop a program to allow them to hook their own renewable sources to the utility’s grid. The Clean Energy Buyer’s Association counts some of the world’s largest tech firms — including Amazon, Meta and Microsoft — among its members.

Cost concerns

The costs of Georgia Power’s plan — and who pays for them — won’t be addressed in this case. That will come later this year, when the company proposes new rates to the PSC.

But there’s an effort afoot to keep residential customers and other businesses from shouldering data center costs.

Last week, the PSC approved changes to Georgia Power’s rules and contract provisions commissioners say will allow the company to charge data centers more.

Last year, the General Assembly passed a bill that would have revoked a state tax credit available to largest server farms. Gov. Brian Kemp vetoed it, but once again, data centers are a hot topic at the Legislature.

Earlier this week, Sen. Chuck Hufstetler, R-Rome, introduced a bill that would require utilities to charge data centers for costs “substantially related to” providing their electric service, potentially adding another layer of protection for other customers.

A House Special Committee on Resource Management led by Rep. Brad Thomas, R-Holly Springs, is likely to explore energy and water consumption by data centers.