Utilities: Data centers must help pay for new infrastructure

As electricity demand rises across Georgia, utilities say a new approach is emerging to protect existing customers: requiring data centers and other large power users to help pay for the infrastructure needed to serve them.

The goal is to ensure residential and business customers are not left paying for the generation, transmission and distribution infrastructure needed to support large energy users. Utilities also are increasingly requiring upfront cash deposits, credit support and minimum billing agreements to help allocate costs fairly.

Dr. Richard Simmons, principal research engineer and director of research and studies at Georgia Tech’s Strategic Energy Institute, said the approach reflects decades of planning by the electric industry.

While communities may worry about how major new developments will affect electric bills and reliability, utilities have long planned for changing demand and are prepared to expand the grid while protecting existing customers, he said.

But Americans can still react to news of big consumers potentially moving to their area and worry about how it will affect them.

“I think there is acute awareness in communities like yours, where there’s a lot of demand that’s coming and who’s going to pay,” Simmons said of Coweta County.

But for electric generators, “that’s part of business as usual,” he said. They have had to figure out how to rise to the demand for decades as growth has occurred, Simmons said.

Chellie Phillips, vice president of communications and public relations for Coweta-Fayette EMC, said the local EMC has had no issues keeping up with demand.

“We have seen an increase every year,” Phillips said. “But nothing that we haven’t been able to fulfill.”

Although electric membership corporations, which serve more rural areas than Georgia Power, haven’t been in the spotlight, they, too, are experiencing increases in demand for power, said Kim Broun, senior communications specialist for Georgia EMC.

“For EMCs, most of that increased demand is due to population growth, economic development and the increasing electric needs of homes and businesses,” Broun said by email.

According to the U.S. Census Bureau’s Vintage 2025 data released last month, Georgia gained nearly 600,000 new residents over the past five years, increasing its population to about 11.3 million.

That number is expected to continue to grow to more than 14 million by 2060, according to the Governor’s Office of Planning and Budget.

One reason for the growth is an overall population shift to the South. Another potential reason is Georgia’s reputation as a good state for doing business.

In 2025, Area Development magazine named Georgia the best state for business for the 12th consecutive year. CNBC also recently recognized Georgia’s business climate, naming it the seventh-best state for business.

That has led to new and expanding industries statewide in logistics, advanced manufacturing, automobile manufacturing and other sectors, Broun said.

“This growth is not just occurring in metro areas, but in rural and suburban communities across the state served by EMCs,” she said. “In fact, according to the Georgia Department of Economic Development, more than 70 percent of new business locations and existing business expansions in Georgia this year are located outside the 10-county metro Atlanta region.”

At the same time, many household items that were previously powered by batteries or fuel, such as vehicles, yard tools and household appliances, are now shifting to electricity, adding to demand for generation, she said.

“While EMCs remain focused on meeting the growing electricity needs of homes, schools, farms, manufacturers and businesses of all sizes in the communities they serve, it is well known that technology companies are interested in locating data centers in Georgia,” Broun said.

“When evaluating the possibility of serving a data center, each EMC, led by a local, member-elected board of directors, considers its unique local conditions.”

Each EMC has its own customers and challenges, including energy demand, a data center’s ramp schedule, the EMC’s existing generation capacity and local infrastructure requirements, she said.

“Some proposed data center projects are projecting electricity demand that exceeds the combined total demand of an EMC’s existing consumer-members,” Broun said. “Regardless of data center activity, every EMC’s priority is to provide reliable, affordable service to its consumer-members while ensuring each one pays only for the electricity they use and the associated generation, transmission and infrastructure costs for their energy demand.”

EMCs are using some of the same strategies as Georgia Power to ensure equitable cost allocations for all consumers, including upfront cash deposits, credit support and minimum billing, she said.

In addition, EMCs carefully plan for projected load growth many years in advance, Broun said. They ensure that electricity supply remains reliable by working with their generation and transmission partners to add power generation and transmission infrastructure as needed.

EMCs also rely on a diverse portfolio of energy resources, including nuclear, natural gas, hydroelectric, coal, renewables and battery storage, creating a more reliable and cost-effective power supply than any single type of resource could provide on its own.

Simmons said the growing concern has also prompted a broader discussion about how to protect existing customers as demand increases.

Whether it is a byproduct of the discussion or an effort to protect consumers, a new model is developing throughout the state in which large energy users are being asked to contribute up front to the infrastructure needed to serve them and even produce some of their own energy, Simmons said. That helps relieve the burden on existing customers, he said.