In short
Since February 1, 2025, any new AI data center or other customer that expects to draw 100 megawatts or more of peak demand from Georgia Power must operate under a customized contract, not standard rates. The Georgia Public Service Commission requires those contracts to carry financial guarantees, terms of up to 15 years, minimum monthly payments, and PSC review 30 days before signing. The PSC also ordered Georgia Power to run cost studies and design rates so that residential and small business customers do not bear the expense of new generation built mainly for data centers. In December 2025, the PSC approved a plan to add nearly 10,000 MW of new power plants, roughly 80 percent expected to serve data centers. A new Customer Identified Resource program, approved in April 2026, lets large customers propose and fund their own clean energy projects for bill credits, with up to 3 gigawatts available through 2035. CEBA, Georgia Power
Why did the Georgia PSC create new rules for AI data centers
In 2022, Georgia Power’s long term forecast showed only about 400 MW of new large load demand over the next seven years. By early 2025, that forecast had jumped to 8,500 MW, and the pipeline of projects seeking service had ballooned to more than 34 GW. Most of that new load comes from AI data centers. Georgia Power serves 2.8 million customers across 156 of Georgia’s 159 counties. It found itself at the center of an extraordinary AI data center buildout. Georgia PSC fact sheet, Georgia Recorder, georgiapower.com
This rapid growth raised two urgent questions. First, how would Georgia Power build enough new generating capacity in time. Second, who would pay for it. The Georgia Public Service Commission, a five member elected constitutional body that sets Georgia Power’s rates and rules, began a series of orders to answer both. The first major step came in April 2024 when the PSC directed Georgia Power to make sure that revenue from AI data centers would push residential bills down, not up, to file quarterly reports with the PSC to track new AI data centers, and to file cost allocation studies. PSC data center fact sheet
What is the 100 MW threshold and what does it change
The PSC’s centerpiece reform, approved unanimously on January 23, 2025 and effective February 1, 2025, is a threshold of 100 megawatts of expected peak demand. Peak demand means the highest amount of electricity the customer will use at one time. Any new customer using an expected peak demand of 100 MW or greater may be required to accept additional terms and conditions beyond the standard tariff. psc.ga.gov, Georgia Power, Georgia Power tariff, Georgia Power tariff
Before this change, an AI data center could take service under the large power and light tariff (PLL-18) or certain time of use options without special conditions. Now, Georgia Power’s tariffs expressly say that new customers at or above 100 MW may only use those standard tariffs if they signed a contract before February 1, 2025. Customers with an expected total peak demand of 100 MW or greater at one or more premises on one tract or contiguous tracts of land may only take service under PLL-18 or the Standard Price Option of TOU-SC-15 if they contracted for such service before February 1, 2025. They must instead negotiate customized contracts under Georgia PSC rules. georgiapower.com, georgiapower.com, Georgia PSC
What Georgia Power can require in a large load contract
The customized contracts have several features that did not exist in the standard tariffs.
Financial guarantees. Georgia Power can require the customer to post collateral, such as a security deposit or a letter of credit, before the utility starts building the power lines, substations, or generation needed to serve the customer. The rule states that for a customer with an expected peak demand of 100 MW or greater, the Company may require performance and credit provisions it deems appropriate to ensure recovery of costs incurred in serving or preparing to serve that customer. georgiapower.com
Termination costs. If the contract ends early, the customer can be required to pay back all the money Georgia Power already spent to get ready. For a customer with an expected peak demand of 100 MW or greater, that covers distribution lines, transmission upgrades, and generation investments. georgiapower.com
Longer contracts with minimum bills. Contracts can now run up to 15 years, up from 5 years before. They also carry minimum billing requirements, meaning the customer pays a set amount each month no matter how much electricity it actually uses. PSC fact sheet, PSC press release
PSC pre approval. Every contract for a customer at 100 MW or more must be filed with the PSC at least 30 days before Georgia Power signs it. The PSC can review the terms and raise objections before the deal is done. PSC fact sheet, PSC rule approval, PSC rule, PSC press release
As of late 2025, Georgia Power had signed 29 large load customer commitments and had filed nearly 2 GW of new contracts under these rules. Six customers are publicly named, including QTS, Meta, Microsoft, Google, X (formerly Twitter), and Walmart. The other 22 are confidential under PSC rules. EEI large load report
How the PSC protects residential and small business ratepayers
The PSC built several other safeguards into its decisions to keep the cost of the AI data center boom from landing on households.
Revenue must push residential bills down. In the April 2024 interim integrated resource plan docket, the PSC ordered Georgia Power to structure its rates so that AI data center revenue exerts downward pressure on residential bills, not upward pressure. The utility must file quarterly reports tracking new data centers and must file studies to provide cost allocations that ensure AI data centers pay total costs. PSC factsheet
Rate freeze through 2028. In July 2025, the PSC froze Georgia Power’s base rates through the end of 2028. The freeze does not cover storm recovery costs, but it puts a hard cap on the most basic part of the bill during the period when the new generation is being built. PSC press release, Georgia Power
A concrete downward pressure target. In the December 2025 stipulated agreement that certified the 9,885 MW buildout, Georgia Power committed that its next base rate case would allocate costs to large load customers in a way that produces at least $8.50 per month of downward pressure on the typical residential bill (using 1,000 kWh) for the years 2029 through 2031. The $8.50 figure is a floor, not a guarantee of lower total bills. Other cost pressures, like rising fuel costs or storm recovery charges, can push the total bill higher even as the AI data center allocation works in the opposite direction. News report, News report
The $8.50 downward pressure figure is a target, not a guaranteed bill reduction. Other cost increases could still push a residential bill higher.
Backstop if AI data centers do not show up. The PSC preserved the power to intervene if the promised loads fail to materialize. It can suspend generation projects that have not yet broken ground, close plants early, cancel out of state power purchase agreements, or order Georgia Power to sell surplus electricity on the open market. Georgia Power also agreed to a financial backstop on some costs through 2031. psc.ga.gov, AJC analysis
The 9,885 MW generation buildout, who pays and what gets built
On December 19, 2025, the PSC unanimously approved a stipulated agreement that certified 9,885 MW of new generation. About 80 percent of that new capacity is expected to serve AI data centers. About 37 percent of the portfolio is natural gas fired, with five new combined cycle units totaling 3,692 MW. Law firm analysis, Georgia Power, Law firm analysis, Law firm analysis
The portfolio breaks down like this.
| Category | Capacity (MW) | What it includes |
|---|---|---|
| Company owned projects | 7,065 | Five combined cycle gas units at Plant Bowen, Plant Wansley, and Plant McIntosh, nine standalone battery energy storage systems, and two solar plus storage projects |
| Power purchase agreements | 2,820 | Contracts with independent developers such as NextEra and Tenaska |
| Total | 9,885 |
The estimated construction cost is $16.5 billion. The total ratepayer cost over the life of those assets is estimated at $50 billion to $60 billion. Law firm analysis
The decision was not without controversy. PSC staff testimony in November 2025 recommended certifying only 30 to 40 percent of what Georgia Power asked for, warning that much of the demand was based on speculative forecasts rather than executed contracts. A Monte Carlo study by Greenlink Analytics and Science for Georgia found that Southeastern utilities’ demand projections materialized in only about 1 in 500 simulations. selc.org
How the Customer Identified Resource program works, bring your own clean energy
In April 2026, the PSC approved a Customer Identified Resource program that lets commercial and industrial customers, including AI data centers, identify and fund their own clean energy projects. A customer can propose a solar farm, a battery storage facility, or a combination. Georgia Power then signs a power purchase agreement with the developer of that project and delivers the energy to the power grid and retires the renewable energy certificates on behalf of the customer. georgiapower.com, Georgia Recorder, Georgia Power, CEBA
The customer pays a monthly tariff that covers the construction and operating costs of the project. In return, the customer gets bill credits and the renewable energy certificates, which can be used toward sustainability goals. The program has a total cap of 3 gigawatts through 2035. Enrollment is expected to reopen on June 1, 2026. georgiapower.com
One open question is how the capacity value of these customer funded resources will be counted. The Clean Energy Buyers Association did not sign onto the settlement because the program does not currently give full credit for those resources in Georgia Power’s capacity planning. That could mean the utility still builds the gas plants already approved even if AI data centers fund substantial new clean generation. Georgia Recorder
What bills the Georgia legislature considered
Several bills in the Georgia General Assembly sought to write AI data center cost protections into state law, but none had passed as of May 2026.
Senate Bill 34, sponsored by Senator Chuck Hufstetler, would have prohibited Georgia Power from including AI data center fuel, generation, and transmission costs in residential rates. The bill passed the Senate Regulated Industries and Utilities Committee 8 to 5 in February 2025, but it failed to get a floor vote in either the 2025 or 2026 session. In February 2026, the Senate abruptly adjourned to avoid a vote after Hufstetler offered a floor amendment that would have restored original consumer protections and appeared to have enough support to pass. Georgia Recorder
House Bill 1063, sponsored by Representative Brad Thomas, passed the House 159 to 5 in February 2026. It required contract terms that shield other customers from AI data center costs, but critics said it merely codified the regulatory status quo without adding meaningful new protections. Capitol Beat
In 2024, the legislature passed House Bill 1192, which would have paused new AI data center sales tax breaks for two years. Governor Brian Kemp vetoed it in May 2024. legis.ga.gov
As of the 2026 session, at least seven bills targeting AI data centers were pending, including SB 34, SB 408, SB 410, SB 421, HB 528, HB 559, and HB 1012. None had become law. Capitol Beat, WABE
Real AI data center projects in Georgia
The AI data center boom is not a forecast. It is already reshaping the state. Here are a few of the major developments.
- QTS Fayetteville. The Blackstone backed hyperscale campus under development in Fayetteville is expected to consume as much electricity as roughly one million U.S. households. QTS is Georgia Power’s largest customer to date under the Customer Renewable Supply Procurement (CRSP) tariff, with a nearly 350 MW renewable energy agreement signed in 2022. q.com
- Microsoft Union City. A nearly $2 billion Microsoft data center campus on 136 acres in Union City, developed by EdgeConnex. ajc.com
- DC BLOX Conyers. The Atlanta East Hyperscale Data Center Campus is under development in Conyers. Capitol Beat
- Stream Data Centers Douglas County. A 1.34 million square foot data center campus west of Atlanta. Data Center Dynamics
Not all announced projects proceed. Since the second quarter of 2024, 19 AI data center projects that had expressed interest in Georgia Power service were canceled or withdrawn, accounting for 83 percent of the megawatts removed from the large load queue. Latitude Media
Key takeaways
- The 100 MW peak demand threshold is the bright line. Any new project at or above it must negotiate a customized contract with Georgia Power, with financial guarantees, long terms, minimum bills, and PSC preapproval.
- Standard tariffs like PLL-18 and certain time of use options are no longer available to new large load customers. Only customers who contracted before February 1, 2025 may keep them.
- The PSC’s orders require Georgia Power to prove that AI data center revenue pushes residential rates down, not up. The utility must file quarterly reports and cost allocation studies.
- The base rate freeze through 2028 provides some near term protection, but other charges can still rise.
- The December 2025 generation certification adds 9,885 MW at an estimated construction cost of $16.5 billion, with total ratepayer costs potentially reaching $50 to $60 billion. Georgia Power faces a financial backstop through 2031, and the PSC can pull back if load does not appear.
- The CIR program, which reopens enrollment on June 1, 2026, gives developers a way to fund their own clean energy for bill credits, up to 3 GW. But the program currently does not reduce the need for the gas plants already approved.
- No Georgia bill directly limiting AI data center costs has become law. The legislative path remains uncertain, placing the burden on the PSC and on the contractual terms of each deal.
- Development is active but also churning. Counsel and developers should factor in the possibility that some projects in the pipeline will not be built, and that the financial backstop the PSC secured could change the trajectory.
Frequently asked questions
Q:What is the peak demand threshold that triggers Georgia Power’s special large load rules?
A:A new customer with an expected peak demand of 100 MW or more at one site or contiguous sites. That is the line at which Georgia Power may require a customized contract, financial guarantees, and termination liability. georgiapower.com
Q:Do the 100 MW rules apply to existing AI data centers that want to expand?
A:The rules apply to new service contracts. An existing customer adding load that pushes it over 100 MW would likely trigger the customized contract requirement, but there may be nuances depending on whether the expansion is treated as a new contract. The Georgia PSC rule approved in January 2025 applies to new customers exceeding 100 MW and sets a framework of 15 year maximum contract terms minimum billing requirements and upstream cost recovery. It does not specifically address existing AI data centers that expand beyond 100 MW and individual contract terms are negotiated with Georgia Power and submitted to the PSC for review. Georgia PSC press release, Georgia PSC data center fact sheet
Q:Can an AI data center avoid the customized contract by splitting its load across multiple sites?
A:The rule looks at one or more premises on one tract or contiguous tracts. Splitting the load across separate, non contiguous sites might fall below 100 MW per site and avoid the rule, but that would depend on how Georgia Power and the PSC interpret the arrangement. Splitting load across non contiguous sites might avoid the 100 MW threshold, but a developer should not assume a simple subdivision bypasses these requirements. Georgia Power Rules and Regulations
Q:What happens if an AI data center fails to meet its minimum billing commitment?
A:The contract will specify the minimum monthly payment. If the AI data center uses less power than the minimum, it still pays that amount. Georgia Power can likely pursue the usual contract remedies if the customer fails to pay, including termination and collection of any early termination costs under the rule. georgiapower.com
Q:Is the $8.50 figure a guarantee that my residential power bill will go down?
A:No. The $8.50 figure is a downward pressure target for 2029 through 2031. It is not a cap and not a guarantee. Other cost drivers, like fuel prices and storm recovery charges, can still push the total bill higher. Law firm analysis
Q:How can an AI data center developer use the CIR program to get clean energy?
A:A developer or large customer identifies a solar, battery, or solar plus storage project. The developer works with Georgia Power, which contracts with the project builder through a power purchase agreement. The customer pays a monthly tariff covering the project’s costs and receives bill credits and the renewable energy certificates. Enrollment reopens June 1, 2026, up to a total of 3 GW. georgiapower.com
Q:Does Georgia still offer a sales tax exemption for AI data center equipment?
A:Yes. The high technology data center equipment exemption in O.C.G.A. § 48-8-3(68.1) allows qualifying data centers to buy computer equipment without paying state and local sales tax. The exemption is administered by the Georgia Department of Revenue under Rule 560-12-2-.117. It is separate from the PSC’s power rules. O.C.G.A. § 48-8-3(68.1), Ga. Comp. R. & Regs. 560-12-2-.117, Ga. PSC large-load data center rule
Q:What should I negotiate in a large load contract with Georgia Power?
A:Focus on the collateral requirements, the scope of termination costs, the length of the contract, the minimum billing schedule, and the ability to transfer or assign the contract if the project changes hands. Because the contracts are confidential and individually negotiated, there is no public template. Georgia Power must provide all new large load customer contracts to the PSC at least 30 days before execution, creating a review window before the contract is final. Georgia PSC data center fact sheet
Q:What happens if the AI data center market cools off and the new plants are not needed?
A:The PSC has the authority to suspend unstarted projects, close plants early, end out of state PPAs, or direct Georgia Power to sell excess electricity. Georgia Power also carries a financial backstop through 2031. The PSC staff and intervenors flagged that overbuilding is a real risk, and the PSC’s backstop authority is intended to address it. psc.ga.gov
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Junde Liu, JD, LL.M. (Taxation) candidate at UF Law. Originally published on Compute Law Blog. This article is general information and does not constitute legal advice. Reading it does not create an attorney client relationship. The reader should not act on the basis of any content here without first consulting a licensed attorney in the relevant state. Last reviewed for accuracy May 23, 2026.