Committee holds action after wide debate over MEAG contract language for large-load customers

The House Regulated Industries Committee paused action on House Bill 1027 on concerns that newly added contract language could prevent municipal utilities and the Municipal Electric Authority of Georgia (MEAG) from competing for large electricity customers such as data centers.

Representative Anderson presented the committee substitute for HB1027, saying it would increase allowable contract terms for MEAG participants from up to 10 years to up to 20 years "to be more competitive in the marketplace." The substitute also inserts contract provisions requiring that the cost of any new power generation built to serve a specific customer be paid by that customer and that such contracts "shall not result in such customer paying a rate less than that charged to retail customers."

MEAG President and CEO James Fuller told the committee that tying allowable contract terms to retail rates could "not level the playing field." He said MEAG sells wholesale to 49 municipal members and that each city sets its own retail rate, which ranges in his estimate from about 10¢ to 16¢ per kilowatt-hour. Fuller said data-center wholesale offers discussed in the marketplace range from about 9¢ to 10.5¢/kWh and that a retail-based floor could preclude some cities with higher retail rates from participating: "If you point into a retail rate for us to be competitive ... some of our cities that have high rates ... would be precluded," he said.

Committee members pressed for clarity about what "retail customers" means in the bill and whether it refers to an average retail rate, residential rates only, or other rate classes. Representative Anderson acknowledged the committee substitute was circulated late and said the intent was that, once any upfront investment is addressed—either contractually or paid up front—the municipality would treat the new customer like others "ensuring that they cover the cost of providing the service plus the margin for the municipality." He also said the language was added in committee sub to protect retail customers from bearing incremental costs.

Several senators suggested consolidating or moving the contract language into other bills addressing data-center policy to ensure consistency across the state's statutory approach. After extended discussion of definitions, competitive effects, and debt-amortization risks, the committee agreed to hold action and take more time to sort through the proposed language; members said they planned to reconvene Thursday to continue consideration.

Clarifying details from the hearing: the committee-substitute defines a "large load customer" as one with an expected total peak demand of 100 megawatts or greater; MEAG said it serves 49 cities and that its largest current participant-level load is roughly 70 megawatts; Fuller estimated residential retail rates in participating cities at roughly 10¢–16¢/kWh and market discussions for data-center offers at about 9¢–10.5¢/kWh.

The committee did not vote on HB1027 at the hearing. The committee said staff and members will study how the retail-rate language intersects with municipal rate-setting and debt amortization before taking further action.