Facing frustration about Georgia Power customers’ rising bills, legislation that would force the utility to charge energy-hungry data centers for the cost of infrastructure built to serve them passed a Georgia General Assembly committee Tuesday.

After hours of passionate debate and testimony across two hearings, the legislation — Senate Bill 34 — cleared the Senate Regulated Industries and Utilities Committee with eight votes in favor and five against. The bill now heads to the Senate Rules Committee.

The vote was a win for consumer advocates, who argued residential customers need more protections to keep them from being saddled with energy costs brought on by the state’s data center boom.

Georgia Power is opposed to the bill, along with data center industry groups.

SB 34 faces an uncertain fate in the Senate Rules Committee, which will decide whether to schedule it for a vote from the full chamber. The Rules Committee chairman, Sen. Matt Brass, R-Newnan, also is on the Regulated Industries and Utilities Committee and voted against the bill Tuesday.

The legislation’s sponsor, Sen. Chuck Hufstetler, R-Rome, said his measure simply was about ensuring data centers pay their fair share. “If we all agree ... that residential ratepayers should not incur costs from data centers, then no one should have a problem with this bill,” Hufstetler said Tuesday.

SB 34 would eliminate Georgia Power’s discretion on data center costs. The bill would require Georgia Power to charge data centers for any costs “substantially related to” serving the facilities, or that “would not have been incurred” otherwise.

Few metro areas in the country are as hot as Atlanta right now when it comes to data center development. A lucrative state tax break available to the largest facilities has played a key role in attracting the server-packed warehouses to the area.

As of the middle of last year, data center construction had increased 76% in Atlanta compared with the same time in 2023, the most among any of North America’s eight primary data center markets, said the real estate services firm CBRE.

The facilities, meanwhile, need huge amounts of power to keep their servers humming 24/7. It’s common for data centers to require 100 megawatts or more of electricity, and some planned in Georgia need 1,000 megawatts to keep running, public filings show. A single megawatt is enough to power several hundred homes, according to the Nuclear Regulatory Commission.

Oversight by the PSC is questioned 

As data centers flock to the state, Georgia Power’s 2.4 million residential customers have seen their power bills rise dramatically.

Since late 2022, the Public Service Commission has approved six rate increases that have pushed up the average Georgia Power residential customer’s monthly bill by about $43, data from the company shows.

Georgia Power proposed and the PSC approved a series of tweaks to the company’s rules and contract provisions last month.

The changes give the utility flexibility to charge data centers for “upstream generation, transmission and distribution” costs required to serve them. Any contract the company signs with a customer that will use 100 megawatts or more of electricity also will be subject to PSC staff oversight. The PSC commissioners, all Republicans, said the new rules would shield residential ratepayers and other customers from data center costs.

Aaron Mitchell, Georgia Power’s vice president of pricing and planning, said Tuesday the company believes the new, PSC-approved rules give it the tools it needs “to balance those costs from being shifted.”

But not everyone felt the changes went far enough.

Robert Baker, who served as a PSC commissioner for 18 years, told the committee Tuesday the rules leave loopholes wide enough to “drive a truck through.”

Baker and others said the legislation is needed now. That’s because Georgia Power already is laying the groundwork to serve the data center influx, building new power plants, costly transmission lines and more.

Tom Bond, director of utilities at the PSC, said the commission was “philosophically” behind the bill, but added there’s some concern the legislation will strip “flexibility” from the agency.

Members of the committee also questioned whether sidestepping the PSC to intervene with legislation was prudent.

“Why is it that you want the Legislature to get out of our lane just for data centers, not anybody else?” Sen. Frank Ginn, R-Danielsville, said at the hearing.