Alabama data center law takes effect Oct. 1: Here’s what it means for your power bill
A new Alabama law taking effect Oct. 1 establishes protections intended to prevent large data centers from shifting infrastructure and energy costs onto other utility customers. The law applies to data centers requiring at least 150 megawatts in Alabama Power's service territory, including a planned facility and substation near Birmingham's Oxmoor Valley, while concerns remain about contract secrecy and public oversight.
A new Alabama law will govern utility contracts for data centers requiring at least 150 megawatts of peak electricity in Alabama Power's service territory. The Alabama Public Service Commission must determine whether projects cover their incremental generation, transmission and other infrastructure costs and provide benefits for existing customers. The commission has also extended its contract review period and is considering a longer review window for future agreements.
The law is intended to protect residential ratepayers, but public versions of the contracts redact pricing, terms and minimum billing requirements. Birmingham resident Kirsten Allen and other Oxmoor Valley residents are seeking stronger assurances about the planned data center and substation near their homes. APSC President Cynthia Almond said data centers must pay their full incremental costs, while Energy Alabama Executive Director Daniel Tait and Harvard electricity-law scholar Ari Peskoe emphasized the need for transparency. Alabama Power defended the redactions and said its agreements require data centers to cover the costs they create.