Alabama Attorney General’s Office wants public PSC vote on data center contracts

The Alabama Attorney General’s Office wants commissioners of the Public Service Commission to vote in public on whether to approve large load contracts, like those that apply to data centers.

The AG’s Office submitted its comments on Aug. 6 for a docket aimed at creating a process to review contracts between Alabama Power and data centers.

“The elected and appointed members of the Alabama Public Service Commission must actively participate in the decisions of the commission by voting on large load contracts, especially when the matter involves an assessment of public benefits or a determination of the public interest,” Olivia Martin, division chief of consumer interest with the AG’s Office.

It was a notable intervention by Alabama Attorney General Steve Marshall, who was first appointed to the office in 2017. Marshall, who is term-limited, ran unsuccessfully for the Republican nomination for U.S. Senate earlier this year.

Alabama has some of the highest residential electricity rates in the South, and the prospect of data centers consuming more electricity has helped fuel large-scale opposition to the facilities and made their construction a major issue in the fall elections. While the attorney general has the power to challenge rates proposed by a utility, neither Marshall nor his recent predecessors have chosen to do so.

Commissioners at the PSC, the state agency responsible for overseeing investor-owned utilities, issued an order in 1996 that delegated much of the authority to approve such contracts to staff so long as the contracts meet “certain conditions outlined in the order.”

However, the memo states that nothing in Alabama law authorizes staff to make the final decisions on such contracts.

“Whenever a legislative agency issues an administrative order that rewrites a statute to ease restrictions, such as eliminating the requirement for a commission vote, the order is ultra vires and invalid,” the memo said.

It also said that a large load contract carries a subjective standard that needs to be analyzed and studied, and “may not be reduced to a set of economic factors evaluated by staff” who have not been appointed or elected to make a final decision.

“We are pleased and impressed by the comments made by the Attorney General’s Office,” said Daniel Tait, executive director of Energy Alabama, a nonprofit that advocates for more renewable energy use in the state, in an interview Wednesday.

The memo also said that the process must allow the public to participate, and that utility customers are “concerned that the utility rates will include expenses for economic development in contravention of the traditional rule that taxpayers, not ratepayers, pay for economic development.”

Commissioners voted to approve a solar project proposed by Alabama Power on Aug. 4 that will support the electricity needs of a data center in Montgomery for Meta, the company that owns Facebook.