Data Centers can and should bring down consumer prices
Georgia Power customers’ bills will go down $15/month by 2029, the company promises. (Below.) OpenAI will switch up to a gigawatt of demand to batteries or backup generators when requested.
That flexibility makes a huge difference. Consumer electric rates in the US went up in 2025 and have been a big political issue. Contrary to popular opinion, data centers did not cause this. They were a convenient scapegoat.
Total demand, including data center in the East COAST PJM anout rose about 2.5%. Some prices rose over 40%. PJM Independent Market Monitor, Joseph Bowring.
It is due to a seriously effed auction/pricing system and grid rules that clobber efficiency.
99% of the time, the electric grid has spare capacity. It’s built to prevent blackouts during the most extreme congestion. That extra, ordinarily unused, capacity is enormously expensive. The problem is worsened by an effed-up auction system that pays ridiculous sums for generators that sit idle almost all of the time.
The good news: Both Republican and Democratic FERC Commissioners have voted to require the electric grids to allow flexible connections like this.
The total cost of energy per MWh increased by $23.47 from $49.21 in the first six months of 2025 to $72.68 in the first six months of 2026, an increase of 47.7 percent. (Bowring)
How this works in other industries
Signalling to raise prices has become standard in many American industries. Long ago, a Vice-President of Time Warner explained to me, “Our DSL competitors and our cable guys have gotten very good at this. No one has to meet in the backrooms of airport motels any more.”
In broadband, the phone company CEO will go to Wall Street and predict that next year prices will go up 6%. The cable company CEO will say something like, “This year we intend to focus on profitability, not market share. We will meet our profit goals if our ARPU goes up 5%.” Or both will say something like, “We hope to cut our advertising costs by about 25%.” Or both will have the CFO brief the top analyst.
Both companies have economists and market researchers listening very closely. Some may be Ph.D. game theorists. Everyone understands.
Voila! The next year prices go up 5-6% or ad budgets drop by a quarter.
The huge increase and the bidding process stinks of collusion. It’s probably done by public signaling, not by clandestine meetings. I have absolutely no evidence of this in energy. But a 2-3% increase in demand should not result in the H2 2026 cost of capacity per MWh increasing 207% from H2 2025. (Bowring data)
The legal system can’t deal with this.
From the company
Georgia Power’s contract with OpenAI approved; Latest approval part of portfolio of large-load
contracts delivering approximately $950 million in annual savings beginning in 2029
Large-load growth continues to provide benefits to customers with expected savings for Georgia Power customers to increase to $180 per year for the typical residential customer; Agreement builds on company’s prior base rate freeze and overall reduction in rates announced this summer
Today, Georgia Power announced that its contract to serve OpenAI’s new project in Effingham County has been approved as part of the regulatory process with the Georgia Public Service Commission (PSC). This marks the latest step in the company’s proactive strategy to ensure Georgia’s growth benefits the customers it serves. With the projects announced to date and projected future growth in the state, Georgia Power customers are expected to see savings of at least $15 per month beginning in 2029 for the typical residential customer using 1,000 kilowatt-hours per month, an increase from the company’s December 2025 commitment of $102 per year to $180 per year.
The increased savings for customers are the result of projected incremental revenue from new large-load customers that is expected to provide savings of approximately $950 million per year, increasing customer benefits to $2.847 billion over the three-year period of 2029-2031.
The company’s contract with OpenAI was filed with the Georgia PSC in July and includes 3,200 megawatts (MW) of new demand. Under that agreement, OpenAI will pay the full cost of the infrastructure needed to serve it and has committed up to 1,000 MW of flexible demand response, which enables Georgia Power to reduce energy delivered to the facility during periods of high demand and invest in fewer new generation resources to serve future growth. Read more here: Georgia Power to serve OpenAI project in Effingham County.
When the first signs of projected extraordinary growth appeared in the state, Georgia Power began developing a framework with the Georgia PSC designed to turn that projected growth into lower costs and higher reliability for customers. Today’s announcement also follows the prior freeze on base rates approved by the Georgia PSC in July 2025, as well as the plan approved in May 2026 to lower overall rates.
“We know every dollar counts, and we know that in many parts of the country growth is pushing electric rates up. That is not happening in Georgia,” said Kim Greene, chairman, president and CEO of Georgia Power. “In December, we committed to $102 a year in savings for the typical family beginning in 2029. Today, that number is expected to be $180. We appreciate the continued diligence of the Commission and its staff in helping us deliver these savings for customers, and ensuring the right protections are in place for the millions of Georgians we are privileged to serve.”
Since 1990, Georgia Power has offered rates, on average, 15 percent below the national average while also offering flexible rate plans for residential and business customers, as well as a wide variety of programs to help customers save money and energy. With new residents moving to the state and large-load customers like data centers and manufacturers choosing Georgia, Georgia Power and the Georgia PSC took early action to put protections for customers in place by introducing new Georgia PSC Rules and Regulations. In addition, the company made a broader commitment to customers in the Georgia Power Customer Protection Pledge which reaffirms the company’s commitment to serving the interests, the communities, and the priorities of its 2.8 million customers.
“Data centers are paying more so families and small businesses can pay less, and our goal with every contract we sign under this framework is to deliver value for them,” added Greene. “Our customers depend on us for reliable and affordable energy every day, and that is the focus behind every decision we make.”