Hearing held on bill to let MEAG members offer 20‑year retail contracts to large customers; financing, consumer protections debated

The Senate Regulated Industries Committee held a hearing on HB 1027, which would add an exception allowing Municipal Electric Authority of Georgia (MEAG) members to enter retail electric sales contracts of up to 20 years for certain large‑load customers. Representative Anderson, who presented the measure, said the change is intended to protect ratepayers and promote competitive equity when municipal utilities compete to serve very large customers such as data centers.

"It is truly a simple bill. It's a rate protect, rate payer protection bill, and, and if you will, a competitive equity bill," Representative Anderson said, explaining the proposal would add a third exception (beyond utility‑scale solar and wind) to permit 20‑year retail contracts in limited circumstances and that those contracts would be subject to superior‑court validation under code section 46‑3‑131 for reasonableness and enforceability.

Pete Dagen, who identified himself as general counsel for MEAG, told the committee the language would permit retail contracts when MEAG must build new generation to serve a customer; he said the ability to enter 20‑year deals would allow MEAG and its member cities to finance facilities and recover costs without exposing cities to undue risk. "The way the language we are proposing... would apply to any customer for whom we have to build new generation to serve that customer and would apply to Crisp County as well as to anybody else," Dagen said.

Jim Fuller, who testified for the sponsoring utilities, described persistent weekly inquiries from large load customers and said MEAG typically needs a 20‑year contract to align financing with the life of the plant. He gave a rough cost estimate for a new gas‑fired 600–700 megawatt plant in the neighborhood of $1 billion. Fuller and MEAG representatives said contracts could be structured as non‑recourse to MEAG (placing initial credit risk on the large customer) and that cities would be able to participate proportionally in projects to spread costs and benefits.

Committee members pressed witnesses on several points: how "large load" should be defined (witnesses said practitioners often use 900 kW connected as a common threshold), whether counties not in customer‑choice territory (Crisp County was discussed) would be covered (MEAG counsel said the proposed language would apply), and whether a city that benefits financially would be required to pass savings on to residential ratepayers (witnesses said cities retain discretion and there is no statutory requirement that savings be passed through). The chair cautioned that prior discussions during the session sought to avoid shifting construction costs to residential customers.

No committee vote was taken; the chair said the bill will return to the committee with draft language for members to review and scheduled follow‑up consideration for the next Tuesday at 10:00 a.m.

The hearing highlighted a tradeoff: proponents said longer contracts enable financing of generation that can attract economic development, while some members expressed concern about credit risk, the mechanics of non‑recourse financing, and whether local ratepayers would see any resulting financial benefit.