How are large-load data center agreements reviewed in Alabama – and what does the public see?

The new procedures retain the customer-protection standard while changing how agreements are submitted and decided:

• Alabama Power files a public petition identifying the data center company and its parent companies, the facility’s location and the maximum electric capacity covered by the agreement. It also summarizes the methods used to meet the public-interest requirements.
• The PSC and AG’s office receive the complete agreement and supporting analysis at the same time the petition is filed. The petition includes a certificate confirming that delivery.
• The review begins when the petition is filed. The interim process included a review of the complete agreement before filing.
• The AG’s office can ask to be included in communications between PSC staff and Alabama Power and suggest changes to the agreement.
• The new process requires a public Commission vote within 90 days after the petition is filed, following a staff recommendation at a meeting announced in advance. If the Commission does not vote within that period, the petition is deemed approved.

Under the new process, the public sees the petition on the PSC’s website. It names the data center company and its parent companies, the city, town or county where the facility will be located, and the maximum electric capacity the agreement covers. It summarizes the methods used to meet the public-interest requirements in state law and PSC rules, and it includes a certificate showing the complete materials went to the PSC and the AG’s office. 

Under the new process, the PSC and AG’s office receive the complete agreement, including all exhibits, attachments and amendments, along with the detailed cost analysis. They also receive a redacted version of the agreement and an explanation of the basis for the redactions. 

Under the new process, the agreement itself – complete and redacted – goes to the PSC and AG’s office, and the public sees the petition. Terms such as pricing, minimum-billing percentages and agreement length work together to set what the customer must pay. Publishing negotiated terms could weaken Alabama Power’s ability to secure strong protections for existing customers in future negotiations. Keeping pricing and other negotiated terms confidential limits what competitors, suppliers and other companies can see. It does not limit what the PSC and AG’s office receive.

The new process requires commissioners to vote to approve or disapprove an agreement within 90 days after the petition is filed. PSC staff presents its recommendation at a meeting announced in advance. If the Commission does not vote within that period, the petition is deemed approved without a vote.

The PSC posts the public petition. When an agreement comes before the Commission for a vote, staff presents its recommendation at a meeting announced in advance. Meeting information is available on the PSC’s Meetings, Orders, and E-Filing page.

Under Act 2026-610 and Alabama Power’s Flexible Contract Rate (Rate FCR), the PSC must determine that the agreement’s pricing and terms are expected, over the agreement’s term, to:

• recover the additional costs the utility would not incur without serving the data center, known as incremental costs; and
• promote positive benefits for other retail customers.

Those costs can include generation, fuel, transmission, distribution, taxes and other costs created by serving the data center.

In simple terms – large-load data centers pay the full cost to serve their energy needs, so costs are not shifted to existing customers.

In assessing benefits for other retail customers, state law identifies considerations such as:

• whether the agreement’s pricing and terms could lower costs for other customers;
• whether the data center is expected to make the power system more efficient; and
• whether the data center contributes to economic growth in the community where it is located.

State law names the kinds of agreement terms the PSC weighs, such as minimum term length, upfront payments, security and collateral, and minimum payments. Alabama Power’s large-load agreements include minimum bills, minimum term lengths, upfront payments, and security and collateral. These protections help keep project-specific investments from becoming the responsibility of families and small businesses if a project changes or leaves.

Alabama Power’s Data Centers and Bills explainer describes how the minimum-bill and minimum-term protections work.

The Alabama Attorney General’s office is separate from Alabama Power and the PSC. Under the new process, it receives the complete agreement and cost analysis when the petition is filed. It can send questions and requests for information, ask to be included in communications between PSC staff and Alabama Power, and suggest changes to the agreement. 

Act 2026-610 took effect Oct. 1, 2026. The PSC’s order requires Alabama Power to file a tariff – the formal rate schedule – within 10 calendar days after the order takes effect. The tariff must specify an effective date at least 30 calendar days after it is filed.

They are reviewed under Rate FCR as the PSC modified it in July 2026, with a 45-day approval period after filing. The customer-protection standard is the same before and after Oct. 1, 2026: pricing and terms must be expected to recover the additional costs created by serving the large-load data center and promote positive benefits for other retail customers.

No. Act 2026-610 puts the standard in state law. Under the new process, the commissioners serving when an agreement comes up for a vote decide whether it meets that standard.