Georgia’s booming data center industry will likely pay more for power

Today’s newsletter highlights:

• U.S. Rep. Rich McCormick questions getting rid of the tax on tips.
• U.S. Sen. Raphael Warnock presses for diversity at the Department of Agriculture.
• State Sen. RaShaun Kemp will be on “House Hunters” tonight.

It wasn’t that long ago that Georgia opened its arms to data centers, handing out incentives for these giant warehouses full of computers that make it possible for you to watch videos on YouTube or scroll through Instagram.

But a recent vote by state regulators shows how the honeymoon period could be over.

The Public Service Commission approved a rule on Thursday that lets Georgia Power, the state’s largest investor-owned utility, charge higher prices for data centers that gulp electricity.

Under the new rules, firms that use more than 100 megawatts of energy will be billed under new terms and conditions than conventional customers who use far less electricity. For context, one megawatt is enough energy to power between 400 and 900 homes.

And the commission likely isn’t finished. Public Service Commissioner Lauren “Bubba” McDonald said the agency will take up more actions linked to data centers to “protect ratepayers” this year.

Georgia has become a magnet for data centers, with more than 50 already calling the state home. More are on the way. Amazon announced plans this month to spend $11 billion on data center projects in Butts and Douglas counties to feed metro Atlanta’s demand for computing power.

The data center industry says it provides the infrastructure that powers the modern economy. An industry-funded study says data centers added $2.1 trillion to the U.S. gross domestic product between 2017 and 2021, noting sector employment jumped 17% during that time.

But there’s also growing angst from politicians and regulators about the new data centers popping up around the state. Former Public Safety Commissioner Robert Baker has warned this will increase electricity rates for everyone as utility companies rush to spend billions of dollars building more power plants to meet demand.

That’s one reason why state lawmakers last year tried to revoke a lucrative tax break for data centers — a tax break lawmakers had voted to extend just three years ago.

Gov. Brian Kemp ended up vetoing that bill to keep the tax break in place following aggressive lobbying by industry executives. But lawmakers are expected to revive the measure this year.

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GOOD MORNING! It’s a big day for the AJC, as we’ll be cutting the ribbon on our new Midtown offices this morning. Here are four things to know for today:

• All of Georgia’s Republican congressional delegation, plus two of its five Democrats, voted for the Laken Riley Act. The bill now heads to President Donald Trump, who is likely to sign it into law, Tia Mitchell reports.
• Keisha Lance Bottoms said she wasn’t leaving politics for good when she opted not to run for a second term as Atlanta mayor in 2021. Now, she’s mulling a run for governor in 2026. “I’m keeping all of my options open. And there are a lot of options in 2026,” Bottoms told the AJC’s Greg Bluestein and Riley Bunch.
• Georgia added nearly 10,000 jobs in December as the unemployment rate stayed steady at 3.7%. Some of the biggest gains were in the state’s motion picture and sound recording industries, the AJC’s Kelly Yamanouchi reports.
• Georgia asked a federal appeals court on Thursday to overturn a ruling requiring more majority-Black state and congressional districts. If successful, the case could weaken the federal Voting Rights Act, the AJC’s Mark Niesse reports.

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U.S. Rep. Rich McCormick (left), a Republican from Suwanee, says changes are needed on how income is taxed.

TIP TOP. U.S. Rep. Rich McCormick, R-Suwanee, said this week he had “concerns” over a plan backed by President Donald Trump to eliminate a tax on tips.

“I know they work hard,” McCormick said of people who make the bulk of their pay from tips. “But so do police officers, firefighters, military people, childcare providers, teachers — a lot of great people who work for less money than those that receive tips.”

We asked McCormick’s office to clarify whether he supports eliminating the tax, which nonpartisan fiscal watchdogs have estimated could reduce federal revenues by more than $150 billion over the next decade. He said a broader change in how income is taxed is needed.

“Our tax code needs policies that are consistent and don’t unfairly benefit one group of hard working Americans over another,” said McCormick, a potential GOP candidate for higher office.

“That said, no one will get everything they want and I am ready to work with the president and my peers to get the best possible outcome for all Americans.”

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Georgia drivers benefited when Gov. Brian Kemp briefly suspended the tax on gas last October.

NO FREE LUNCH. Georgia drivers got a break at the pump last year when Republican Gov. Brian Kemp briefly suspended the gas tax in the aftermath of Hurricane Helene.

But as Kemp’s budget proposal shows, nothing in life is truly free.

Kemp has asked state lawmakers for more than $98 million to backfill the revenue lost during that two-week period in October when drivers saved 33 cents per gallon.

While it’s true taxpayers will fill the gap, you likely won’t feel it in the same way. There’s a big difference between paying money at the pump versus having the state income tax cover the difference. That’s especially true considering Kemp and Republicans cut income taxes last year and plan to do it again this year.

Suspending the gas tax has been a popular method for governors looking for quick response to a crisis. Kemp also suspended the tax when gas prices soared in the summer of 2022.

“As with previous suspensions that were ratified by the general assembly, we look forward to working with our legislative partners on this and other measures to deliver relief to those impacted by this and other storms,” a Kemp spokesperson said.

Kemp’s gas tax proposal is part of his nearly $615 million request for responding to Hurricane Helene damage. That includes $225 million for debris removal, infrastructure repair and sign replacement.

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U.S. Sen. Raphael Warnock, a Georgia Democrat, said the U.S. Department of Agriculture has an "unfortunate history" of racial discrimination.

GOODBYE DEI. Georgia U.S. Sen. Raphael Warnock wrote a law in 2021 that made the U.S. Department of Agriculture create an equity commission.

But the commission’s report has vanished from the department’s website in the first week of President Donald Trump’s administration. On Thursday, Warnock asked Brooke Rollins — who beat out former Georgia U.S. Sen. Kelly Loeffler as Trump’s pick for agriculture secretary — if she would consider those recommendations.

“Sir, I will consider anything that’s on the table,” she said. “But … President Trump won on the concept of removing the diversity, equity and inclusion; making sure that we are basing our decisions on merit, and I obviously support that 100% as well.”

That sounds like a “no” to us.

Warnock, a Democrat, framed his questions around what he said was the “documented and unfortunate history of racial discrimination” at the U.S. Department of Agriculture. That includes discrimination in the department’s farm lending programs.

Warnock said he wanted Rollins to commit to recruiting “more diverse employees to understand these communities.”

“Sir, my commitment is to recruit the best workforce in the history of the United States Department of Agriculture. Period, full stop,” she said. “I believe that will include many members of all different corners of our country.”

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State Sen. RaShaun Kemp, a Democrat from South Fulton, will be featured on the HGTV program "House Hunters" tonight.

SHOWTIME. Georgia state Sen. RaShaun Kemp, D-South Fulton, and his husband, Christopher, will be featured on a new episode of “House Hunters” tonight at 10:30 on HGTV.

The show follows people who are buying a new house. HGTV’s episode description says it will feature two professionals who “need a bigger home for the family life they imagine in Atlanta.” But it notes that “when it comes to style and price, they’re not even in the same neighborhood.”

Kemp, a new lawmaker who took office last week, said the process was “both exciting and challenging” and is “something I will never forget.”

“While we are incredibly grateful for this opportunity, not every Georgian can securely afford a safe home,” Kemp said. “That’s why we must work this legislative session to make housing more affordable, so every Georgian can find a safe, warm place to raise their family.”

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LISTEN UP. Today on “Politically Georgia,” immigration attorney Charles Kuck joins the show to talk about President Donald Trump’s policies. Then, the AJC’s Zachary Hansen discusses Trump’s executive order about electric vehicles. Plus, the hosts answer questions from the listener mailbag.

Be sure to download the show on Apple Podcasts, Spotify or wherever you get your podcasts. Have a question for the show? Give us a call at 770-810-5297. Episodes are uploaded by noon each day, just in time to have lunch with us. You can also listen live at 10 a.m. EDT on 90.1 FM WABE.

On Thursday’s show, Democratic state Sen. Emanuel Jones discussed his recently announced challenge to U.S. Rep. David Scott for the 13th Congressional District. And GOP state Sen. Jason Anavitarte talked about his trip to President Donald Trump’s inauguration, as well as the executive orders on immigration Trump has signed.

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COLLINS ADVANCES. Former Georgia U.S. Rep. Doug Collins received nearly unanimous support from the U.S. Senate Veterans Affairs Committee, which voted to advance his nomination as Veterans Affairs secretary to the Senate floor.

Both the Republican chair of the committee and its top-ranking Democrat spoke in favor of Collins ahead of Thursday’s vote. Sen. Richard Blumenthal, D-Conn., said he was impressed by Collins’ answers during a hearing earlier this week when Collins pledged to work in a bipartisan fashion to improve Department of Veterans Affairs facilities and expand mental health programs.

“Hopefully, he will be the kind of advocate that we really are going to need in this era when the challenges will be greater than ever before fiscally, and the pressure to scale back, to cut costs, to pursue harmful policies that may negatively affect our veterans will also be greater,” Blumenthal said.

Sen. Mazie Hirono, D-Hawaii, was the only member of the committee who voted “no” on moving Collins’ nomination to the floor, citing his refusal to commit to keeping a rule from the Biden administration allowing the VA to perform abortions in cases of rape, incest or when the life of the mother is at risk. She also said she was concerned Collins would support the privatization of VA care.

The Senate could begin the process of confirming Collins next week.

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TODAY IN WASHINGTON:

• President Donald Trump will tour areas in North Carolina damaged by Hurricane Helene before traveling to Los Angeles to tour neighborhoods destroyed by wildfires.
• The U.S. Senate could take more votes on nominations, including whether to confirm Pete Hegseth as defense secretary.
• The House is done for the week.