A surge in data center development has turned Georgia into a national hotspot while raising fresh concerns about the state’s energy landscape and natural resources.
After a massive request from Georgia Power to expand its energy capacity by about 10,000 megawatts due to unprecedented growth driven largely by a rise in data centers and a recent focus on energy affordability, particularly after Democratic successes campaigning on the issue in 2025, lawmakers seem likely to consider legislation that could help regulate the power-hungry, massive facilities.
The 2026 legislative session started last week.
Ratepayer protections
Sen. Chuck Hufstetler, a Rome Republican, is renewing his effort on Senate Bill 34, a bill designed to protect residential ratepayers from costs associated with data center infrastructure by prohibiting costs associated with fuel requirements, generation and transmission from being included in general rates.
Hufstetler said in a recent interview that, despite the Public Service Commission passing its own rule to address costs after his bill was introduced last year, his legislation still needs to pass. He said the current rule is insufficient and lacks the permanence of law.
“Their rule has enough loopholes in it to drive a truck through, so we need it codified into law,” Hufstetler said.
The commission’s rule could also be easily bypassed, said Amy Sharma, executive director of Science for Georgia. Sharma said the current PSC framework is “littered with loopholes” that give utilities too much flexibility.
“I do think that something more ironclad from the Georgia General Assembly is definitely needed,” Sharma said in a recent interview.
A central concern for Sharma is what she called vagueness in determining which infrastructure projects are actually for data centers. She pointed to a controversial project in Fayetteville in which high-voltage transmission lines were run through residential yards, and to the mixed messaging that followed about whether it was intended to serve data centers or residential customers.
“Who’s determining if this is needed for a data center, or if they can just be like, ‘Oh, this is grid strengthening,’” Sharma asked.
Tom Krause, a spokesperson for the PSC, said in a statement that the commission “philosophically agree(s) with Sen. Hufstetler’s bill because it mirrors the rule we had already put in place for Georgia Power,” but did not say if the commission supports or opposes the bill.
“Other states have since adopted their versions of the Georgia PSC rule. All the feedback we have gotten from other states is that Georgia’s rule very effectively protects existing ratepayers from data center costs,” Krause said.
Mandating disclosures
While Hufstetler’s bill addresses the costs associated with data centers, House Bill 528, sponsored by Junction City Democratic Rep. Debbie Buckner, focuses on the natural resources these facilities consume. The bipartisan bill would require facilities with a peak demand of 30 megawatts or greater to submit annual public disclosure reports on their energy and water usage.
Buckner described the measure as a “communication bill” intended to help local governments understand the impact of developments that often arrive under non-disclosure agreements.
“A lot of times, development authorities are the ones that recruit these kinds of industries, and that information about what they’re going to use is not always fully disclosed to the local governing authorities,” Buckner said.
Sharma said that understanding the current state of natural resources and the overall impact from development is essential for future planning, saying that Georgia currently lacks even a uniform system to track exactly how much power and water these centers use.
“Step one is understanding the problem,” she added. “We don’t know what the situation is on the ground right now.”
The data center industry, however, maintains that data center activity is a net positive for the state’s economy and its energy grid. Khara Boender, director of state policy for the Data Center Coalition, an organization representing the data center industry, said in a statement that the industry is already meeting its obligations and even helping to stabilize costs for other Georgians.
“Across the country, states are recognizing the critical role data centers play in the 21st-century economy and the many benefits they provide to local communities,” Boender said in a statement. “Data centers are committed to being responsible neighbors in the communities where they operate. The industry employs sustainable water practices in its operations and remains committed to paying its full cost of service for the energy it uses.”
Boender pointed to a rule adopted by the Public Service Commission aimed at helping ensure data centers pay for the energy infrastructure they need and Georgia Power’s 3-year rate freeze, saying the industry “will continue working with policymakers to ensure responsible, equitable treatment so Georgia can compete for this investment, supporting jobs, strengthening local tax bases, and positioning the state to lead in a modern, data‑driven economy.”
Re-examining tax incentives
A December audit by the Carl Vinson Institute of Government at the University of Georgia examined the state’s sales and use tax exemption for data centers and concluded that the policy has cost the state at least $1.5 billion in lost revenue since its inception, including nearly $500 million in fiscal year 2025 alone. The audit found that about 70% of data center investment in Georgia would likely have occurred regardless of the tax break because of the state’s existing fiber infrastructure, low risk of natural disasters and utility reliability.
The fiscal impact of the credit is also projected to increase, potentially reaching an annual loss of $800 million for the state by 2030. The audit also concluded that the facilities create relatively few permanent jobs, typically fewer than 50 per center, once operational, after employing about 1,500 employees at peak construction. The audit’s authors estimated that the number of permanent data center jobs in 2025 was just under 1,900.
House Speaker Jon Burns, a Newington Republican, said at a recent press conference that while the credits helped attract the industry, clawing back the tax credits could be considered in the future.
“A lot of people have made decisions based on those tax credits, but that’s a discussion we’ll have on down the road,” Burns said.
The Georgia Assembly passed a bill in 2024 pitched as a pause on the tax credits to allow the state to assess the data centers’ impact on the grid, but it was ultimately vetoed by Gov. Brian Kemp. Now, some lawmakers are gearing up another push to reconsider the tax credit given to data centers.
Lawmakers on Friday introduced two bills to at least in part end the tax credit. Senate Bill 410, sponsored by Newnan Republican Sen. Matt Brass, would allow tax credits for data centers that have already been approved to remain in place, which could address Burns’ concerns. And Senate Bill 408, sponsored by Atlanta Democrat Sen. Nan Orrock, would sunset the tax credit incentive in 2027, five years ahead of the original date. In an interview Friday, Orrock said that her bill is aimed at reeling in the “mega installations” that have massive energy consumption, water usage and a lack of significant job creation.
“The public opinion, the public reaction to the data centers marching into the state, consuming all that electricity, all that water, and all that real estate — they’re vast installations, and oftentimes it plays very inappropriately in terms of their proximity to neighborhoods. It’s going to be a big issue that you’ll see us dealing with in this session,” Orrock said.
Sharma suggested that if the credits remain, they should be repurposed and granted only if a facility minimizes water use or invests in energy-saving technologies.
“You should use tax incentives to incentivize good behavior,” she said.
A statewide moratorium?
Also on Friday, Rep. Ruwa Romman, a Duluth Democrat and 2026 candidate for governor, introduced House Bill 1012, which would place a statewide moratorium on the construction of data centers until February 2027. She said the intent of the bill is to give local governments time to develop local policies that better serve their communities. Romman said the bill has bipartisan support, with Woodstock Republican Rep. Jordan Ridley as a co-signer, and that “people are filling city halls and county meetings, saying ‘we don’t want this.’”
“You can’t really restore the land to what it used to be. And a lot of these counties and cities have been very overwhelmed, trying to figure out what is the best policy,” Romman said.