Georgia Power deal to serve $20B OpenAI data center goes under the microscope
Georgia Power’s deal to provide electricity to a massive, OpenAI campus planned near Savannah is drawing regulators’ scrutiny and reviving debates about how to keep residential customers safe from the facilities’ costs.
The proposed $20 billion data center complex from OpenAI, maker of the popular artificial intelligence chatbot ChatGPT, is one of Georgia’s largest-ever economic development projects. The development, which OpenAI calls Project Camellia, is expected to cover hundreds of acres in an Effingham County industrial park, about 30 minutes outside Savannah.
It’s also slated to be the single-largest electricity user in the state of Georgia.
The facility needs 3,200 megawatts of power, roughly equal to the output of three of the nuclear reactors at Plant Vogtle outside Augusta, though both Georgia Power and OpenAI say it will be able to cut its usage by about one-third when demand from other customers surges.”
The size of those demands — combined with the secrecy around the contract to provide all that power — landed the issue under regulators’ microscope during a committee meeting Thursday at the Public Service Commission.
Commissioner Alicia Johnson, a Democrat from Savannah, said during Thursday’s meeting that “any customer who is requiring this amount of energy should expect an equal amount of rigor and scrutiny.”
A wave of anti-data center sentiment has swept the state as Georgia has emerged as a top destination for the hulking campuses, which require huge amounts of energy and water to operate. Voter anger over a series of Georgia Power rate increases in recent years helped topple two Republican PSC incumbents last year.
In the run up to last year’s election, the PSC and Georgia Power agreed to keep the company’s existing base rates through 2028. A separate deal approved earlier this year will save the average residential customer about $4.04 a month.
The PSC also last year approved changes to Georgia Power’s billing and contract terms that provide more oversight of the utility’s agreements with so-called “large load” customers planning to use 100 megawatts of power or more.
With energy needs 32 times that threshold, OpenAI’s facility fits the bill.
The updated rules let Georgia Power set minimum billing requirements and sign customers to longer-term contracts. The utility and Republicans on the commission have said the measures will ensure residential customers don’t foot the bill.
But they also give the PSC staff the ability to object to terms that don’t “adequately protect existing customers from bearing any of the costs of adding the customer.”
A 30-day clock for the PSC staff to review Georgia Power’s deal with OpenAI started July 15 when the utility filed the contract. That window was set to close this past Friday.
But Georgia Power filed an extension Thursday, buying the utility time to negotiate. The PSC’s staff now has until Aug. 26 to complete its contract review.
On Thursday, before the extension was submitted, the PSC’s director of utilities Tom Bond told commissioners his staff had been planning to object before the deadline.
“Right now, unless the company agrees to certain changes, staff would file an objection,” Bond said during Thursday’s PSC committee meetings.
Ratepayer protections questioned
If the staff files an objection, it would be the first time since the commission approved the new data center contracting provisions.
Georgia Power spokeswoman Meredith Stone said in a statement the utility is “confident the contract includes strong financial safeguards and has been structured to protect and deliver value for all customers,” but added the company supports the commission and staff’s efforts to vet it.
In a statement, OpenAI said the company “will continue working constructively with the commission and its staff as they thoroughly review the project.”
“OpenAI is committed to paying the energy and related infrastructure costs associated with Project Camellia, consistent with the safeguards established by the Georgia Public Service Commission,” the company said.
But there have been longstanding questions about how well the PSC provisions actually protect ratepayers.
Consumer advocates have warned that the PSC rules for Georgia Power’s contracts leave the utility too much discretion to dictate terms. Others say the measures don’t do enough to ensure residential customers won’t ultimately be on the hook for costly power infrastructure upgrades, if mega-electricity users like OpenAI terminate contracts early.
Commissioner Peter Hubbard, a Democrat who is seeking reelection to serve a full six-year PSC term, said Thursday he had concerns about the contract and urged the commission staff to object.
“We see what those (contract) terms are and I do not believe that those provide sufficient financial guardrails to protect ratepayers,” Hubbard said.
Other commissioners said they trust staff to conduct a thorough review of the contract.
“I look forward to seeing what comes out of their decision-making process,” PSC Chairman Jason Shaw, a Republican, said Thursday. “So until then, I’m going to stay out of their way and just be thankful that they’re doing their job.”
Hidden from public view
The secrecy around the contract itself also drew criticism from members of the public Thursday.
While commissioners and PSC staff have been able to review the contract’s fine-print, the version released to the public is redacted in its entirety.
Georgia Power frequently conceals chunks of its filings, claiming the information is “confidential and proprietary,” and that its public release could put the company at an economic disadvantage. Unlike residential customers, large load customers like data centers and some factories, can choose their power providers.
Groups have challenged the practice but the PSC has so far elected to give the company wide latitude to keep certain information hidden.
Jeffrey Beauvais, an advocate from the coastal environmental nonprofit One Hundred Miles, told commissioners Thursday that the “complete lack of information about this contract is deeply troubling.”
“It’s reason enough for the staff to file an objection and for the commission to reform the review process that you currently have,” Beauvais said. “Georgians deserve transparency and access to basic information needed to engage in informed discussions.”