Who pays for AI data centers? NBC 5 investigates protections for Texas electric customers — NBCDFW

[00:00:00] Speaker 1: Tonight, NBC5 investigates AI data centers and the impact on your electric bill. Who should pay for expanding the Texas electric grid to add more data centers? [00:00:11] Speaker 2: Tonight, we take you to another state that says that it is protecting families from those costs and requiring data centers to foot the bill. Our Scott Friedman traveled to see if there are lessons Texas can learn. Scott? [00:00:23] Speaker 1: We had to check it out when we heard Georgia said it froze electric rates and shielded residential customers from paying to expand the grid for data centers. So is it working, and could Texas do the same? The answers we found show both sides of promise and some challenges. In this sultry southern state, the electric grid sizzled through Atlanta's summers even before the arrival of AI data centers that can send power use soaring. It's truly unprecedented off the charts. [00:00:56] Bob Sherryers: The need for twice as much power in the state? Yeah. In five years? In five years. So if you think about it, it took us 100-some-odd years to build up to where we're at now. We're going to double that in the next five. [00:01:08] Speaker 1: Bob Sherryers with a legal advocacy group that wants to protect electric customers from higher bills as Georgia adds new electric lines and power plants to support data centers. He fears utilities will spend a fortune to expand the grid, and then the data center market could suddenly change. If companies left the state, he worries families would face higher electric rates for years, paying off the costs of all that construction. [00:01:31] Bob Sherryers: It's a big bet that the power companies and the data centers are making, and we don't want to backstop it. [00:01:39] Speaker 1: But in Georgia, the state says it's already providing protection. Do you really believe that you've backstopped customers here? You don't have concerns that the ordinary person is going to end up having to pay for this data center growth? [00:01:52] Jason Shaw: Yeah, I do. I honestly think that what we've done to date has got all the protections in place and more. [00:01:58] Speaker 1: Jason Shaw is chairman of the Georgia Public Service Commission, the state's electric regulator. Last year, the PSC announced a deal with the state's major electric provider to freeze electric rates for at least three years. The PSC says it's also required the power company to sign long-term guarantees with new data centers, committing them to pay for grid expansion for years, even if they leave. Shaw believes power bills will eventually go down, not up, because data centers will cover a bigger share of the costs. [00:02:27] Jason Shaw: We're going to do everything we can here at the commission to continue to take advantage of these benefits using the leverage that we have in negotiating these large load rules and contracts. Should we be looking to Georgia as a model? [00:02:43] Patty Durand: Absolutely not. Are you kidding? That would be a disaster. [00:02:47] Speaker 1: Patty Durand leads an advocacy group focused on lowering electric costs and argues the state's rate freeze is deceptive. First, she says the freeze came after years of rate increases, effectively locking in higher prices. And she says it also delayed state hearings on new electric rates for three years, making it harder for the public to see how much grid expansion is costing right now. [00:03:08] Patty Durand: The rate freeze means there's no scrutiny on the spending and no ability to stop it or change direction until it is too late. [00:03:16] Speaker 1: Durand also complains the contracts requiring data centers to backstop costs are not open to the public. She and other watchdog groups fear those contracts will contain exit clauses, potentially letting data centers off the hook ahead of the advertised long-term guarantees. [00:03:31] Patty Durand: It's really the secrecy that is concerning people. [00:03:35] Bob Sherryers: We have to take a lot of this at how they've described it publicly without being able to actually evaluate the language and what's in there itself. [00:03:44] Speaker 1: The PSC says its staff scrutinizes those contracts. But Georgia has laws like other states that prohibit the release of information companies deemed to be trade secrets. The PSC says the contracts have 15 to 25 year guarantees. And if a data center exits early, the PSC also points to this letter agreement the power company signed with the commission, saying it will not seek to recover those costs from residential customers. So even if the AI bubble bursts, you're confident regular folks aren't going to be paying for this here? [00:04:16] Jason Shaw: No, in this case, it would be the data centers and the shareholders of the for-profit regulated utility. Shaw tells us he's also been in contact with other states adopting similar rules. If you don't have these rules and these protections that we've developed here in Georgia, then somebody's assuming the risk. And I'm afraid if it's not done right, then it's the ratepayers that will be taking those risks. [00:04:42] Speaker 1: What they did here in Georgia may be harder to do back in Texas because, as experts point out, the Texas electric market is not the same. In the ERCOT power market, most Texans choose from multiple electric companies, unlike Georgia, where regulators set the rates charged by one utility serving most customers. So Texas can't just freeze rates the way regulators did in Georgia. But the Texas Public Utility Commission, or PUC, is working on other rules aimed at financially protecting consumers. [00:05:11] Speaker 6: Well, the concept of the financial security is written down. It's in a proposed rule right now. It, you know, all of this evolves on the speed of regulation. [00:05:24] Speaker 1: Beth Garza served for years as ERCOT's independent market monitor, a watchdog tracking the Texas grid. She explained state lawmakers passed SB 6 in 2025, creating rules requiring large electric customers like data centers to pay grid connection costs up front and post financial security. Now the PUC is considering rules where if a data center backs out and forfeits that money, it would be used to offset costs for other electric customers. [00:05:52] Speaker 6: And there's details to be worked out, but there is a way to do this to protect existing and specifically small consumers. [00:06:01] Speaker 1: The Texas PUC turned down an interview request. But at a hearing earlier this year, the chairman assured lawmakers he wants to guarantee data centers won't leave families with higher electric bills. [00:06:13] Speaker 7: It's not just, in my opinion, ensuring that ratepayers are protected. It's being able to show them that they're being protected. And so the rules that we're looking to promulgate are going to accomplish that. [00:06:24] Speaker 1: Those rules are due out in December. But as we found in Georgia, rules pledging protection can still leave questions about transparency, potential for loopholes, and whether families will see proof of protection in their bills. [00:06:37] Bob Sherryers: People do understand when their power bill goes up and when it goes down. And people don't want to pay for the cost that these data centers are costing. [00:06:46] Speaker 1: Georgia Power tells us it'll be able to save customers an average of $180 a year as data centers pay more in the future. The company says it also shares all data center contract information with state regulators so they can ensure compliance with the new rules. Brittany? [00:07:02] Speaker 2: And in Texas, there's now a new governor on the way. So could she and the legislature do more to make sure that we don't all end up paying for this? [00:07:08] Speaker 1: Yeah, we expect this to be at the top of the agenda when the legislature meets again in January. Governor-elect Ina Hossa has pledged new rules to protect consumers from data center cost increases. So a lot could happen here. But as we saw in Georgia, the process may be more complex than it seems on the surface. The details matter. So we'll keep tracking this. [00:07:27] Speaker 2: Okay, all right. [00:07:28] Speaker 1: You're watching. Scott, thank you.