Georgia Power deal to power OpenAI data center is approved, with some fine print
Staff for Georgia’s top utility regulator on Wednesday approved Georgia Power’s deal to power a $20 billion OpenAI data center planned near Savannah, while also spelling out protections for ratepayers if the facility — or others like it — pull the plug early.
Environmental and consumer advocacy groups called the agreement a step in the right direction, but cautioned that regulators still have work to do to mitigate the risk the data center gold rush poses to residential ratepayers.
The joint statement approving Georgia Power’s contract to serve OpenAI was signed by the Georgia Public Service Commission staff and the utility and submitted to the PSC on Wednesday afternoon. The agreement was filed roughly an hour before a 4 p.m. deadline for commission staff to approve or object to the contract to power the complex.
OpenAI announced plans last month to build the sprawling computing campus in Effingham County, one of the biggest data center complexes ever proposed in Georgia.
As part of the deal, Georgia Power promised it would not collect any revenue shortfalls from other ratepayers if OpenAI or another data center operator terminates its contract early. If a large data center customer cancels its service, Georgia Power agreed to notify the PSC within 15 days.
Though base rates are currently frozen, Georgia Power also pledged to structure its next rate adjustment in 2028 to put $15 of “downward pressure” on the average residential customer’s monthly bills. The utility considers customers that use 1,000 kilowatt-hours of electricity a month “average” for modeling bill impacts, though many use far more, especially in summer. Any new rates adopted in 2028 would take effect in 2029 and last through 2031.
In a statement, Georgia Power President and CEO Kim Greene said, “Data centers are paying more so families and small businesses can pay less, and our goal with every contract we sign under this framework is to deliver value for them.”
Indeed, the $15 commitment is a step up from the $8.50 in “downward pressure” Georgia Power previously promised, but consumer advocates say there’s no guarantee they’ll see their monthly bills drop as a result. “Downward pressure” doesn’t necessarily mean a rate cut or a bill credit is coming — only that the company’s next set of residential base rates will be $15 lower than they otherwise would have been.
An OpenAI spokesperson said the approval will allow the project to move forward “while protecting Georgia families and businesses.”
“We will continue working closely with Effingham County residents and leaders, state officials, and Georgia Power to ensure the project delivers lasting benefits for the community,” the spokesperson added.
Georgia is one of the hottest markets for data centers, large computer-filled warehouses that need massive amounts of electricity to operate. And Georgia Power has undertaken a historic grid expansion to serve them, one that’s likely to cost tens of billions of dollars, according to some estimates.
Consumer advocates warn that even with promises that data center operators will pay for their electricity and infrastructure, such a massive grid expansion could still shift costs to everyday customers.
Liz Coyle, executive director of the consumer protection-focused nonprofit Georgia Watch, said the deal appears to provide some benefits for ratepayers, but cautioned that those benefits are based on “theoretical assumptions.”
“The letter to commissioners is full of ‘ifs’ that leave open the possibility that incremental costs could be shifted to other ratepayers in future proceedings,” Coyle said in a statement.
‘Appropriate safeguards’
The OpenAI deal is the seventh approved under a framework the PSC adopted last year for Georgia Power’s contracts with data centers and other “large load” customers.
The facilities require huge amounts of power and often new, costly infrastructure to deliver the electrons. The rules were meant to ensure the utility’s residential ratepayers aren’t on the hook for the costs.
On top of letting Georgia Power set minimum billing requirements and sign customers to long-term contracts, the rules gave the PSC staff oversight of the company’s data center contracts.
But scrutiny of the OpenAI contract has been especially intense because of the vast amounts of electricity the facility will require.
The campus to be built in an Effingham County industrial park is slated to demand up to 3,200 megawatts of power. That would make it the single-largest electricity user in the state with demand roughly equal to the output of three of the nuclear reactors at Plant Vogtle outside Augusta.
Commissioner Peter Hubbard, a Democrat seeking reelection to serve a full six-year PSC term, said earlier this month he had questions about whether the companies’ contract “provided sufficient financial guardrails to protect ratepayers.” Before Georgia Power bought more time to placate concerns, commission staff had also indicated they were planning to object to the OpenAI contract.
Commissioners from both parties said they supported the new agreement.
“Our staff attorneys, engineers and financial analysts have ensured this contract has some of the strongest residential ratepayer protections in the nation,” Republican PSC Chairman Jason Shaw said in a statement.
Commissioner Alicia Johnson, a Democrat from Savannah, said in a statement that she felt assured that the agreement contains the “appropriate safeguards.”
“Based on the record before us, I believe this agreement provides meaningful protections against shifting the costs and risks associated with this project onto Georgia’s residential and small-business customers,” she said.
‘Big problems … with the contracts’
Though Georgia Power’s deal with OpenAI has been under the microscope behind the scenes, the public has not — and likely won’t ever — see what’s in the actual contract.
Like each of the other six contracts Georgia Power has filed under the PSC’s data center rules, the public version of the utility’s OpenAI agreement is completely redacted. Georgia Power frequently conceals large chunks of its filings, claiming the information is “trade secret” and that its public release could put the company at an economic disadvantage.
Wednesday’s move won’t force the utility to divulge any fine print, but it does institute new provisions that could increase transparency.
Going forward, Georgia Power will have to provide semiannual public reports on the performance of its data center customer portfolio. The utility also agreed to release a summary of each large load contract it inks, but it was unclear how detailed the filings will be.
A public summary of the OpenAI contract is expected in early September.
Meanwhile, Georgia Power executives and some PSC commissioners have for months touted Georgia’s rules for data center contracts as the industry-leading standard. But with the commission now adding new terms and clarifying others, critics say it raises questions about how well regulators have managed the explosive energy demands data centers are bringing to the Peach State.
Bob Sherrier, an attorney at the Southern Environmental Law Center, called the OpenAI deal a “step in the right direction,” but said there’s “more to do to protect Georgians.”
“This is about more than OpenAI,” Sherrier said. “It exposes that there are big problems with the data center contracts.”