OpenAI data center in Effingham County clears major hurdle
Georgia regulators cleared a key step for the planned $20 billion project on Wednesday.
EFFINGHAM COUNTY, Ga. —
Above video: Aug. 26 Evening Headlines
Georgia regulators have cleared a key hurdle for OpenAI’s planned data center in Effingham County, declining to challenge Georgia Power’s proposed electricity contract for the project.
In a joint letter published Wednesday, attorneys for Georgia’s Public Service Commission and Georgia Power said the contract follows PSC rules and is designed to shield households and most businesses from the costs of serving large electricity users.
“Staff does not object to the contract filed on July 27, 2026,” the letter said.
The review was conducted under rules the PSC adopted in 2025 for new customers with electricity demand of at least 100 megawatts, a category increasingly dominated by data centers. According to the letter, staff reviewed the contract and supporting documents, requested additional information from Georgia Power and met with company representatives several times before reaching its decision.
A representative for PSC Commissioner Peter Hubbard confirmed to WJCL that the July 27 filing is the contract to serve OpenAI. The staff letter does not identify the customer, and the contract itself has not been made public.
The letter reflects a decision by PSC staff under the commission’s large-load contract review process, not a vote by the five-member commission.
The decision comes as Georgia faces a surge in projected electricity demand driven largely by data center development. Since the project was announced in July, Effingham County residents have raised questions about its electricity needs and the potential effect on the power grid and customer bills. Similar concerns have followed data center development nationwide as utilities plan new power plants and transmission infrastructure to meet rapidly growing demand.
PSC staff said the contract and Georgia Power’s related commitments address the financial risk to smaller customers, allowing the electricity agreement to move forward without a staff objection. The decision does not approve the entire data center project or resolve broader questions about its effect on the power grid.
Protections against potential shortfalls
Georgia Power will track how much revenue it receives from new large-load customers, the minimum amounts those customers are required to pay and the projected cost of serving them, according to the letter.
If a large data center customer leaves before its contract ends, Georgia Power must notify the PSC within 15 days. The company also agreed not to ask residential customers to cover the resulting shortfall through future rate increases.
If a shortfall remained, the PSC would decide whether and how it should be recovered, including whether other large-load customers should pay it.
PSC staff said it has reviewed six other large-load contracts under the same process and found that each met the commission’s requirements.
More public reporting promised
Georgia Power agreed to provide more public information about its growing portfolio of data center customers. Along with its existing quarterly reports, the company will issue updates twice a year on how its data center contracts are performing and whether the projects are operating.
It also will release a public summary whenever it submits a large-load contract for PSC staff review. A summary of the contract between OpenAI and Georgia Power is due within 10 days and could offer the clearest look yet at the terms of the agreement, which has not been made public.
Projected residential benefit increases
Georgia Power also increased its promised benefit to residential customers from large-load growth. If enough of those contracts are approved to cover previously authorized power generation, the company says the added revenue will hold a typical residential bill at least $15 a month below what it otherwise would be from 2029 through 2031. That is up from an earlier commitment of $8.50.
The $15 is not a bill credit or a guarantee that bills will decrease. Fuel, storm recovery and other costs could still push bills higher.
Georgia Power’s base rates are currently frozen through 2028. In its next rate case, due July 1, 2028, the company must include a minimum estimate of the revenue it expects from large-load customers. PSC staff said those commitments protect smaller customers, though the agreement could be revisited if laws or regulations change.
Commissioner credits scrutiny for stronger commitment
Hubbard said he personally reviewed the OpenAI contract and credited scrutiny from him and fellow Democratic Commissioner Alicia Johnson with securing the increased commitment for residential customers.
“The Commission passed a rule last April that set the procedure: Staff reviews and if they object then the Commission has 30 days to review,” Hubbard said in a statement to WJCL on Wednesday. “I personally reviewed the contract, even if other commissioners didn’t see fit to do so, and because of staff’s review and Commissioner Johnson and I putting our feet down, we have an additional promise from Georgia Power on the benefit that large load customers will bring to residential ratepayers (now a promise of $15/month in downward pressure on rates).”
Hubbard, a Democrat, defeated Republican Fitz Johnson in a 2025 special election. The two will face each other again in November as Hubbard seeks a full term.
Georgia Power did not immediately respond to WJCL’s request for comment on the staff decision.
With PSC staff declining to object, the electricity contract can move forward under the PSC’s large-load review process, clearing a key regulatory step for the planned $20 billion OpenAI data center announced July 22. The decision applies to the project’s electricity agreement and does not constitute approval of the entire development.