Alabama AG Pushes Consumer Protections in Data Center Boom
Alabama Attorney General Steve Marshall is urging the Alabama Public Service Commission to strengthen consumer protections regarding electricity contracts for large-scale data centers. The AG seeks greater public participation and scrutiny in reviews, arguing against shifting the costs of increased electricity demand to household consumers. The PSC is currently considering how to implement a new state law (Act 2026-610) that requires data centers to cover their incremental electricity costs.
Alabama Attorney General Steve Marshall is advocating for enhanced consumer protections during the state's rapid expansion of AI and data centers, which are projected to significantly increase electricity demand. Marshall has formally urged the Alabama Public Service Commission (PSC) to allow greater public participation and regulatory scrutiny in the review of electricity contracts between Alabama Power and large-load data center customers. The core of the debate centers on ensuring that the substantial infrastructure costs required to power these facilities are borne by data center operators and not passed on to residential and business ratepayers.
Marshall's intervention comes as the PSC considers procedures for implementing Act 2026-610, a new state law that mandates data center electricity contracts recover incremental costs from the data center customers and provide positive benefits for other retail customers. The PSC opened Docket 33709 to establish these review procedures, initially proposing a 60-day approval process with limited public input. Marshall argues for a broader assessment of the overall impact of large electricity users on Alabama consumers, emphasizing the PSC's responsibility to protect ratepayers. He also highlighted that the PSC has not conducted a formal electricity rate hearing since 1981.
Alabama Power, conversely, contends that its large-load agreements already incorporate protections like minimum bills, upfront payments, and collateral to prevent cost-shifting to existing customers. The utility maintains that its contracts are designed to recover incremental costs and benefit the power system and economic development, while arguing against a rigid regulatory structure due to the varied nature of data center projects. Despite these assurances, Alabama Power estimates a potential electricity supply shortfall by 2029, underscoring the urgency of the debate on future generation capacity and infrastructure investment. The PSC is slated to review the proposed data center rules at its September 1st meeting, a decision that could shape Alabama's approach to the burgeoning electricity demands of AI and cloud infrastructure for years to come.