Committee advances bill allowing MEAG 20‑year contracts with safeguards to protect local ratepayers

The Regulated Industries and Utilities Committee voted Wednesday to advance a committee substitute to House Bill 1027 that would permit MEAG Power to enter contracts of up to 20 years with large load customers, notably data centers, while adding provisions designed to protect municipal retail ratepayers.

Representative Anderson (S6) presented the substitute and described changes from the prior version: the draft removes references to retail customer rates and instead requires that any additional generating capacity built to serve a large load customer be paid for by that customer during the initial contract term, limiting the risk that construction costs would be shifted to smaller local customers.

Pete Degnan, general counsel for MEAG Power (S2), explained the authority’s existing Fulton County Superior Court contract‑validation process and why it matters to MEAG’s credit and bond ratings: “When MEAG Power purports to do any new project ... we have to go to Fulton County Superior Court and get authority to issue the bonds to support that construction effort,” Degnan said. He said the superior‑court review produces final, legally binding validation of contracts that bond markets value. Degnan added that under the substitute a large load customer would be expected to pay 100% of its portion of new generation construction costs during the initial contract term, providing a mechanism to protect other ratepayers.

Committee members pressed on safeguards: whether the proposal preempts city rate‑making authority, how MEAG’s contract would interact with differing municipal retail rates, and whether a competitive bidding process (RFP) would be used. Degnan and Representative Anderson said the substitute is intended to leave retail rate‑making with cities and to use objective criteria and a centralized MEAG negotiation process so small cities can participate without absorbing costs.

Members also discussed non‑discrimination principles and how cities must design rate classes so a given rate applies to all customers meeting specified objective criteria. The panel noted that city rate‑making authority is supported by state law and case law, and that the substitute aims to avoid cross‑subsidization by allocating construction cost responsibility to the new large load customer.

A motion to pass the substitute (LC474302s) was made and seconded; the chair called the motion and recorded nine in favor and one opposed. The committee voted to send the bill on to the rules committee.

What’s next: The committee referred HB 1027 to the rules committee; sponsors said the substitute would undergo minor drafting edits by legislative counsel.