Georgia PSC backs disputed Georgia Power fuel deal amid data center cost concerns
The Georgia Public Service Commission voted Thursday to approve, without changes, an agreement between Georgia Power and the PSC’s Public Interest Advocacy staff that establishes how the utility can bill customers for fuel costs and storm damage restoration expenses.
Under the stipulated agreement, the typical residential customer will see annual savings of approximately $50, or roughly $4 per month, effective June 1, with total annual savings across all Georgia Power customers projected at approximately $285 million. The deal also cuts how much the company can recover from customers for storm costs by nearly 60%, raises the threshold before Georgia Power can profit on storm repair work, and caps how much natural gas the utility can purchase at locked-in prices in advance.
Commissioner Peter Hubbard offered amendments to the stipulation that would have directed an investigation into Georgia Power’s fuel transportation costs, hedging practices and the company’s decision to operate certain coal plants. A separate Hubbard motion sought to withhold 10% of disputed coal dispatch costs, or approximately $15.2 million, unless Georgia Power could provide justification for its coal use.
Hubbard’s motions were supported only by Commissioner Alicia Johnson. Commissioners Jason Shaw, Bubba McDonald and Tricia Pridemore voted them down, 3-2, along party lines.
“Today’s vote by the Georgia PSC will bring lower rates and real savings for Georgia families and businesses as the heat of summer begins,” said Tyler Cook, Georgia Power’s CFO and treasurer.
Under Georgia law, the commission’s ability to reduce what Georgia Power charges customers for fuel is limited — the utility is entitled to recover those costs, and the commission can only reject them if the spending was illegal or obviously unjustified. Clay Jones, an attorney representing the Georgia Association of Manufacturers, cited the statute at Thursday’s hearing in urging the commission to approve the stipulation without changes.
Consumer and environmental groups acknowledged the rate reduction but argued the agreement left broader accountability questions unresolved.
Data centers are not paying for several costs they are responsible for driving up — including new gas pipelines, solar power purchase agreements, and the utility’s program to lock in natural gas prices in advance — according to Bob Sherrier, an attorney with the Southern Environmental Law Center who intervened in the proceedings.
“The data center customers pay their fuel costs, but no offset is provided to the rising costs that they are causing other customers to bear,” Sherrier said at the hearing on Thursday. “It was undisputed that data centers are driving up fuel costs per unit of energy for everyone, and not contributing to that either.”
PSC Public Interest Advocacy staff found that large industrial customers drive up average fuel costs for all other customers by approximately 5 to 11% per month, Sherrier said, and Georgia Power never explained why data centers shouldn’t have to pay for those increased costs.
The commission agreed to open a separate investigation into how fuel costs are allocated between large industrial customers and residential and small business ratepayers.
Georgia Power attorney Steve Hewitt said at the hearing that large industrial customers, like data centers, bring significant benefits to base rates that offset their fuel cost impact.
Georgia Power’s plans to increase its reliance on natural gas — from 50% of its electricity generation to 59% — could leave customers increasingly exposed to volatile fuel prices, according to Georgia PIRG.
The group argued Georgia Power should bear at least some of the financial risk when gas prices spike.
“Since Georgia Power, not its customers, is making investment decisions, it should bear at least some of the risk of fuel price volatility,’ said Abe Scarr, Georgia PIRG’s energy and utility program director.
In December 2025, the Commission approved a $16 billion construction plan to build new power resources primarily for data centers and other large industrial customers, with billions more expected through a new procurement process. The Georgia Conservation Voters Education Fund argued that against that backdrop, a $4 monthly reduction does little to offset what customers are already paying to support that growth.
“Giving customers back $30 over the rest of 2026 won’t change the fact that the PSC has already sold our state out to data center companies and told us to be grateful,” said Doha Medani, Georgia Conservation Voters Education Fund’s organizing director.
Georgia Power's decision to run certain coal plants cost ratepayers approximately $152 million, according to testimony from Michael Hawthorne, campaign organizing strategist for the Sierra Club, who told commissioners the case revealed a fundamental problem with how fuel costs are regulated. “This case comes down to a simple structural problem,” Hawthorne said. “Georgia Power bears none of the consequences for its fuel-related decisions, while ratepayers bear them all.” Georgia Power attorney Steve Hewitt said the analysis behind the $152 million figure was incomplete and inaccurate, arguing it failed to account for the operational realities of running coal plants. “With no incentive to control costs or reduce the use of uneconomic coal plants, Georgia Power continues to get a free pass,' Hawthorne said."
The commission’s investigation into how fuel costs are allocated between data centers and other customers is expected to include all interested parties and get underway later this year.
“We appreciate that there’s more work to be done here and the commission’s openness to correcting it,” Sherrier said.
This story was originally published May 28, 2026 at 5:51 PM.
