ATLANTA – Business leaders are gearing up to defend the growing proliferation of power-hungry data centers in Georgia from an expected pushback in the General Assembly by critics worried about the industry’s impact on electric rates.
Gov. Brian Kemp vetoed a bill the legislature passed last year that would have temporarily suspended a state sales tax exemption aimed at attracting data centers to Georgia.
Republican legislative leaders had supported House Bill 1192, arguing the rapid growth of data centers is putting a strain on the state’s energy grid.
“They put an enormous demand on electric and water resources,” said energy lawyer Bobby Baker, a former member of the Georgia Public Service Commission. “If these data centers come in, you’re taking an enormous amount of electricity that could power a manufacturing plant that creates a lot more jobs and eliminating that option. It’s going to hurt Georgia.”
But Chris Clark, president and CEO of the Georgia Chamber of Commerce, which urged Kemp to veto the bill, said data centers are springing up in Georgia and elsewhere because people want them.
The latest example is an application submitted Thursday for a proposed 2.5-million-square-foot data center complex in Newton County occupying nine buildings.
“These data centers are a response to consumer demand,” Clark said.
Georgia House Speaker Jon Burns announced earlier this month the creation of a special committee to develop a resource management plan for the state that will take into account the anticipated effects of the growing demand for energy and water on supplies. While Burns said the panel will not specifically target data centers, they are likely to occupy a good deal of its time.
“We haven’t had a state energy plan since 2006,” Clark said. “It’s a smart move.”
State Rep. Brad Thomas, R-Holly Springs, who will chair the committee, said its work will continue after the General Assembly adjourns the 2025 session in early April.
“We’ll do the bulk of our work in the off-season,” he said. “We can’t just go in and take a bite at such an important piece of our economy in nine weeks.”
Baker said the tax incentives last year’s legislation was seeking to suspend are neither necessary nor justified. He and other critics of data centers say they don’t provide the economic impact to justify offering tax breaks.
“They create a handful of jobs,” he said. “There’s no benefit to Georgia.”
Baker also argued that the volume discounts such large users of electricity get drive up electric rates for residential and small business customers, which have soared by 37% in the last two years.
“These large customers all qualify for these marginal rates that are a quarter of what we pay,” he said. “We don’t need any more increases for residential and small commercial folks. They have been pounded hard.”
But Clark said the storage capabilities of domestic data centers in Georgia and other states are vital to the nation’s national security at a time data centers are cropping up all over the world and storing Americans’ personal information.
“We want that data stored as close to home as possible,” he said.
Clark said he expects the special committee to examine Georgia’s long-term energy needs through 2040 or 2050.
“I hope we don’t scapegoat or pick winners and losers,” he said.
Thomas said he expects the committee to hold its first meeting during the week of Jan. 27.