Data center demand gut-check
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A major loan from the U.S. Department of Energy is aiming to keep electricity prices down in Alabama and Georgia as data centers and artificial intelligence soak up more and more electricity.
Why it matters: The $26.5 billion loan to Southern Company subsidiaries Georgia Power and Alabama Power is the largest the department has made outside the financial crisis.
- That's per Alex Fitzsimmons, acting undersecretary of the U.S. Department of Energy, and director of its office of cyber security, energy security and emergency response, speaking to Axios's Ben Geman last week.
- At an Axios Live event Feb. 25, Fitzsimmons said the loan, set to upgrade and expand generation and transmission infrastructure, should save ratepayers in Alabama and Georgia $7 billion.
Caveat: Huntsville, Madison County and the rest of the Tennessee Valley receive electricity from the Tennessee Valley Authority, not Alabama Power, but TVA is feeling the data center pressure-and vowing to keep prices low-too.
- In the first quarter of this year, TVA puts data center demand at 18% of its industrial load, expecting that to double by 2030.
- As Huntsville Utilities CEO Wes Kelley told city council members at a work session last week, data centers made up just 1% of that demand about six years ago.
Case in point: Huntsville's already home to multiple data centers, including the Meta data center and two from provider DC BLOX.
What they're saying: "We will be working with our board to ensure that serving new data centers does not create rate pressure on other electric customers and consumers across the Tennessee Valley region," TVA CEO Don Moul said in an investors call earlier this year.
- Nationwide, data centers are set to account for about 50% of U.S. power demand growth by 2030, Axios reports.
The bottom line: "There may be a data center that comes to Huntsville, but it won't be incentivized and recruited," Kelley said at the workshop Friday.
Go deeper: Tech ratepayer pledge may be more bark than bite — but still matters