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Georgia’s largest electric utility is preparing to meet what it says is a huge spike in new electricity demand. Georgia Power says it expects it will need to provide 8,200 more megawatts by 2031 – about four times the energy made by its brand-new nuclear reactors at Plant Vogtle.
A key factor driving Georgia Power’s plans is the enormous growth in need the company says it expects over the next few years from large industrial customers – especially data centers.
But some critics argue Georgia Power’s predictions are too high. Energy experts testifying before the Georgia Public Service Commission this week cast doubt on Georgia Power’s prediction of a massive, rapid increase in energy demand – known as load.
“We conclude that the forecast produced by Georgia Power is likely skewed to show load realization sooner and in greater quantity than is likely to materialize,” said Robert Trokey, who leads the electric unit of the Public Service Commission’s staff.
Getting that forecast wrong could have major implications for customer bills and for climate change.
The commission last year approved new natural gas turbines and battery storage that Georgia Power asked for in an emergency request driven largely by expected data center demand.
Now, the commissioners are considering the utility’s new long-term energy plan as part of a regularly-scheduled regulatory proceeding.
The plan calls for keeping coal plants open longer, upgrading nuclear and hydroelectric power plants, adding solar and improving power lines.
Georgia Power made its case to the commission over several days of hearings in March. This week, the commission’s public interest advocacy staff and the intervenors – environmental and consumer advocacy groups, municipal governments, industry groups and large power buyers like MARTA and Walmart – responded with their own expert testimony.
Several of them simply did not buy Georgia Power’s predictions.
“The way the company has treated its load forecast is deeply flawed,” said energy planning consultant Derek Stenclik, who testified on behalf of the Sierra Club, Southern Alliance for Clean Energy and Natural Resources Defense Council. “I would even call it utility planning malpractice.”
He and other analysts said the currently-booming data center industry is too new to make confident predictions. They argued that Georgia Power isn’t properly accounting for the chance that data center projects could fall through.
To make forecasts for big customers like data centers and factories, Georgia Power experts run projects in various stages of development through mathematical models that predict how likely the projects are to actually open and how much power they’ll need.
But the company uses different calculations for data centers, predicting they’re more likely to come to fruition than other potential customers like factories and warehouses.
The company doesn’t have data to back up that different math, Trokey argued. Others questioned whether Georgia Power’s modeling adequately accounts for canceled projects.
Officials with the utility maintain their modeling is based on real projects, factoring in how far along the data centers are in the development pipeline and whether data center developers have signed a contract to buy energy from Georgia Power. In the earlier hearings in March, company officials said that any cancelled data center projects had so far been quickly replaced by new ones.
During this week’s hearings, commissioners expressed little patience for skepticism from experts and advocates about the company’s forecast for data center-driven demand.
“Obviously the company believes it’s real because they’re putting them under contract,” said Commissioner Tricia Pridemore. “The state of Georgia believes it’s real. Georgia Department of Economic Development has been involved. The Governor’s been involved. Commissioners have been involved. We’ve worked on these projects, in some cases for years.”
Georgia Power’s forecast is critical because it shapes how the utility plans to be able to meet future, predicted demand.
If the company overestimates, Stenclik and others argued, it risks spending too much on the infrastructure to make and deliver extra energy, and regular customers could end up paying for it. If it underestimates, the company contends, energy reliability could be at risk.
Much of the company’s plan to meet its forecast in the near term relies on fossil fuels, which many public commenters opposed because they contribute to climate change. They urged the commission to consider the impacts of climate change before approving any new or extended use of coal or natural gas.
Considering rates later
The power rates that customers pay, though based on the need to pay for construction and other expenses approved in the energy plan under consideration, are not a part of the current hearings before the commission.
Instead, rates are typically decided during a subsequent proceeding called a rate case.
But rates are top of mind for many Georgia Power customers because their bills have increased six times in the last three years: three rate hikes approved in the last rate case in 2022, two to pay for new reactors at Plant Vogtle, and a separate bill increase to cover high natural gas costs.
This year, the utility and commission staff have proposed an agreement that would freeze rates for now, bypassing the regular rate case. That’s possible largely thanks to the increased revenue Georgia Power is expecting from new, large customers – like data centers.
The commission has also taken steps to help ensure data center companies and other large customers pay for their own infrastructure. But witnesses in this week’s hearings questioned whether those measures are sufficient to protect residents and small businesses from extra costs.
Energy analysts for the commission’s staff also said they’re concerned about rates increasing for other reasons, like cleaning up storm damage and complying with environmental regulations. The deal to freeze rates already includes a plan to address the costs of Hurricane Helene next year.
Upcoming elections
Two of the five commissioners who will vote later this year on both Georgia Power’s long-term plan and the proposed rate freeze are up for election in November. Early voting in the primary has already begun.
This week, one candidate in that primary was disqualified for failing to fulfill residency requirements. He has said he will appeal the decision.