Georgia Power CEO talks data centers

CUMBERLAND — The state of Georgia is prepared to handle data centers, according to Georgia Power President and CEO Kim Greene.

Greene spoke during the Cobb Chamber’s monthly luncheon this week, where she said Georgia Power is equipped to handle data centers and new large customers, unlike other states, because the company is vertically integrated and regulated by the Public Service Commission.

Vertical integration means the company controls multiple stages of its business or supply chain, leading to less reliance on third party sources.

“That means we own the power plants, we own the transmission lines, the big wires that you see in the country or when you’re on the interstate, and we own the distribution lines, the smaller lines to your home. We own it all and control it all,” Greene said.

She said vertical integration gives Georgia Power the flexibility to optimize and distribute power as needed when a new customer comes to the company.

She pointed to other states, including Pennsylvania, New Jersey, Maryland, New York and California, where power companies operate in deregulated markets after large power companies were broken up and forced to give up control of transmission lines.

The move was meant to incentivize more power plant construction, but, according to Greene, the market was thin and companies did not have confidence in the return on investment.

“And so now, when some larger data centers and larger other manufacturing is coming, this financial market is failing. And power prices are spiking and people are afraid. And I understand that,” she said.

She said cost spikes are not happening in Georgia because the utility has not changed.

“It’s not happening in Georgia because we’re doing it here the way we always did it. And we are in control of it all,” she said.

Data centers, she said, are not new, but she has seen and heard misinformation surrounding them.

“We’ve also served data centers for many, many years. Twenty plus years, and data centers are all around us. But we are seeing an increase in the demand for data centers,” she said.

During the presentation, Greene played a clip of CNBC’s “Squawk Box” morning news and talk segment, where co-anchor Andrew Sorkin discusses data centers.

In the clip, Sorkin claims the deals any data centers makes with energy suppliers say “you need to keep us running 99.99% of the time,” which means energy goes to the data center first, rather than customers.

Greene pushed back against Sorkin’s claim.

“Do we guarantee you 99.99% reliability? Does anybody have that? Please speak up. I’m confident there will be no one. Because we don’t do that. And especially with the data center. Good heavens, it’s Georgia. We got trees, we have storms, we have squirrels. We have very bad days. Can’t make a guarantee like that. We haven’t signed any contracts like that. And no CEO that I know of who is also signing contracts with data centers is making any kind of guarantee like that. I don’t know where he got that information. It’s wrong,” she said.

She said contracts signed with data centers across the state include contracts ranging from 15-25 years, early termination fees, post collateral and have minimum bill requirements.

“So a company, irrespective of whether they’re taking all the power that they said they take, they pay us a minimum bill,” she said.

Despite larger data centers being build across the state, Greene said Georgia Power froze its base rates for three years.

“Now, the cost of people, the cost of materials is going up. But it’s being offset by these data center excess revenues. So, they pay more. So you, our residential and small commercial customers, pay less. And they’re happy to do that,” she said.

In closing, Greene assured the audience the company will continue to push for lower prices and higher reliability.

“But while you’re seeing other parts of the country struggle, know that you’re in a good spot,” Greene said.

Greene will transition from her role as Georgia Power president to president of Southern Company in the new year.

Jenn Garner, a chamber member and corporate responsibility and philanthropy professional, said she was glad to get some clarity on Georgia Power’s data center controls.

“My advice would be for Georgia Power and other utilities that are kind of in the mix around the data center conversation and are obviously a critical part, to kind of share the story of what they are doing. It’s clear that there’s a lot of misinformation. I think we all usually hear from the loudest voices, but the reality is usually somewhere in the middle,” she said.

Garner noted Greene’s discussion of the three-year rate freeze.

“My question would be, ‘What happens in year four?’” she said.

Andy Gaines, a chamber member and executive director of the Earl and Rachel Smith Strand Theatre, said he was glad the chamber provided an opportunity for local businesses to learn more about how data centers are handled in the state.

“That being said, it was very nice for Georgia Power to come in and explain why, not just ‘believe us, it’s OK’ but to explain on a more granular level, why the actions taken in the past are causing a future that we’re not going to have to worry as many other states might in the country,” he said.