Proposed data centers could use more electricity than all Alabama homes combined. Who will pay?
Alabama residents are concerned about proposed data centers that could consume more electricity than all homes combined, potentially raising power bills. A new state law, SB 270, requires the Public Service Commission to consider public interest in data center contracts, but transparency is limited due to redactions. Community opposition persists against projects like Project Marvel in Bessemer and Project Red Clay in Lowndes County, while the issue becomes a focal point in the state's gubernatorial race.
Alabama residents and environmental groups are voicing significant concerns over a surge of proposed data center developments across the state, which an Inside Climate News analysis suggests could collectively consume more energy than all Alabama homes. Despite Alabama Power's assurances that residential power bills will not increase, critics fear that secretive contracts and a lack of transparency will ultimately shift costs to ratepayers.
The debate centers on the implementation of SB 270, a new state law requiring the Alabama Public Service Commission (PSC) to evaluate data center contracts for public interest, including whether they recover all incremental costs from developers. However, the PSC's review process has been criticized for limited transparency, with key financial details in Alabama Power's contracts with developers like Alabama ADC Holdings heavily redacted, prompting calls for full financial disclosure from residents and advocacy groups such as Energy Alabama and the Southern Environmental Law Center.
Specific projects, such as Project Marvel in Bessemer and Cloverleaf Infrastructure's Project Red Clay in Lowndes County, have faced strong community opposition over environmental impacts, water usage, and local official secrecy, including the signing of non-disclosure agreements. While Project Marvel's rezoning has been approved despite resident concerns, the larger issue of data center regulation has become a prominent topic in the Alabama governor's race, with candidates Tommy Tuberville and Doug Jones holding opposing views on the industry's benefits and the need for a moratorium.
Meanwhile, Alabama Power's corporate profits are on the rise, and a state-mandated rate freeze through 2027 is viewed by some as a delay tactic that will lead to higher bills post-2027, particularly with the cost of a new natural gas plant being deferred. The structure of the PSC itself is also set to change, expanding to seven members and shifting some power to a state energy secretary appointed by the next governor, further complicating the regulatory landscape.