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Hearing held on bill to let municipal utilities sign 20‑year retail contracts for large customers; MEAG outlines financing approach
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Summary
At a hearing on HB 1027, sponsors and witnesses from municipal utilities and MEAG described allowing up to 20‑year retail contracts for large load customers (including data centers) to enable financing of new generation, with protections such as superior‑court validation and proposed nonrecourse bond structures; senators pressed for clarity on definitions, local impact and whether cities must pass savings to residents.
The Senate Regulated Industries Committee held a hearing on House Bill 1027, which would add an exception allowing Municipal Electric Authority of Georgia (MEAG) participants to enter retail electric sales contracts up to 20 years for large load customers, including data centers. The measure is presented as a ratepayer‑protection and competitive‑equity bill intended to let municipal utilities finance new generation without exposing cities to long‑term stranded costs.
Representative Anderson, the bill sponsor, described HB 1027 as "truly a simple bill" designed to protect ratepayers and give municipal providers a chance to compete for large customers. He said the measure would add a third exception allowing 20‑year retail contracts and stressed that such long contracts would be subject to superior court review under code section 46‑3‑131 to confirm reasonableness and enforceability.
MEAG witnesses detailed how extended contracts would be used to finance new plants. Pete Dagenham, general counsel for MEAG, told the committee the proposed language would apply to any customer for whom new generation is required to serve the load — including counties that do not fall under customer choice such as Crisp County — and would allow MEAG to require a large customer to pay 100% of the cost of any new generation needed to serve it.
Jim Fuller, who testified for the proponents, said MEAG frequently fields inquiries from large load customers and that financing new generation over 20 years aligns contract terms with debt service and reduces exposure for participating cities. Fuller and other witnesses described a market approach: issue a reverse RFP, select a best proposal, offer participation to all 49 MEAG cities, and allocate project shares by percentage. They cited Plant Wansley as a potential site and estimated that a new gas‑fired plant in the 600–700 MW range could cost roughly $1 billion.
Committee members raised several concerns: how "large load customer" would be defined (the bill does not set a specific numeric threshold), whether cities would be required to pass savings from long‑term deals to residential ratepayers (MEAG witnesses said cities retain discretion and that rates and contracts are subject to open records), and what happens if a large customer defaults. MEAG said it would structure project debt on a nonrecourse basis for the participating cities — meaning bondholders would look primarily to the customer's credit during the contract term — and noted similar structures were used for earlier projects such as Vogel 3 and 4.
Senators also questioned sequencing and risk: whether customers would pay costs upfront or over time, how oversubscription would be handled, and whether smaller cities would be left out; MEAG described a subscription cap based on each city's historical share of debt payments to Plant Wansley as an equitable allocation method.
The hearing concluded without a committee vote. Chair Mister Harris set HB 1027 for further committee consideration, scheduling the item for the committee's Tuesday 10:00 meeting so the sponsor could provide revised language reflecting the discussions.
