What did the commission approve?
On October 6, 2026, the Alabama Public Service Commission voted unanimously to adopt a new process for reviewing Alabama Power’s electricity contracts with large load data centers. The commission is the state agency that sets the rules and prices for Alabama Power. The process covers what a new state law, Act 610, calls a large load data center. That is a site expected to need 150 megawatts or more at its peak. AL.com A megawatt is a unit that measures how much power a customer draws at one time.
Act 610 took effect October 1. It lets the commission approve such a contract only if its price and terms are expected to do two things. They must recover the incremental costs of serving the site from the data center itself, and they must benefit Alabama Power’s other customers. PSC July minutes Incremental costs are the extra costs Alabama Power would not have without that customer, such as new generation, transmission lines, fuel and taxes. NBC 15
What Alabama Power has to file
Alabama Power must file two packages at the same time, according to the staff recommendation the commission posted. The first is a public petition. It names the customer and its parent companies, the city or county where the site sits, and the most power the contract allows. It also summarizes how the deal meets the law. PSC staff recommendation
The second package goes privately to the commission’s legal staff and the state Attorney General’s office. It holds the full contract and an analysis of the extra generating capacity needed, the costs assigned to the project, and the expected revenue. It also includes a test that compares the cost of serving the site with the revenue the contract brings in.
The staff recommendation bars Alabama Power from sending information to staff informally before it files the petition. PSC staff recommendation Alabama Power told the commission in July that it used to work with staff for weeks or months before formally filing a contract. ABC 33/40 After filing, staff and the Attorney General may send questions, and Alabama Power must try to answer within five business days. The process has no public hearing and no way for outside groups to join as parties. PSC staff recommendation Alabama Power should file each petition at least 120 days before the contract would become void for lack of approval.
| Question | Under the old 1996 contract rate | Under the new process |
|---|---|---|
| How long the commission has | 10 days | 90 days |
| Whether commissioners must vote | No vote required | Vote required, or the contract is deemed approved |
| What the public sees | A heavily blacked out contract | Customer, parent companies, location and maximum power |
| Attorney General’s role | Not automatically included | Gets the full contract at filing |
| Talks with staff before filing | Common practice | Not allowed |
Which customer protections the contract has to carry
The commission did not require any fixed protections in the contract. It decided that the standards in Act 610 are enough without a list of required terms. AL.com Energy Alabama had asked for required minimum contract lengths, monthly payments, financial security and exit payments.
Alabama Power says its agreements can already include a minimum bill. A minimum bill is a monthly charge the customer pays for its reserved power whether or not it uses that power. The company says its agreements can also carry minimum terms, upfront payments and collateral. AL.com
In August comments, Alabama Power said its contracts run more than a decade and bill at least 80 percent of reserved capacity. The public copies of three contracts it filed this year blacked out the term, the minimum bill and the price. Energy and Policy Institute Under the new process, only commission staff and the Attorney General see the full contract.
When a contract takes effect without a vote
The commission must vote within 90 days after Alabama Power files the petition, under an amendment adopted at the October 6 meeting. If the commission does not vote by then, the contract is deemed approved. 1819 News Deemed approved means the contract takes effect as if the commission had voted yes.
The old 1996 contract rate deemed a contract approved 10 days after filing unless the commission rejected it. ABC 33/40 While the new rules were being written, contracts filed before October 1 got 45 days. Alabama Daily News
The Attorney General’s office argued in August that the law requires a commission vote on every contract. The commission’s executive director said at the meeting that he does not agree. Alabama Reflector He said his recommendation was not based on the Attorney General’s comment.
Alabama Power must file a tariff within 10 calendar days of the order taking effect. A tariff is the published rate schedule that puts the process into effect. It cannot take effect sooner than 30 days after filing. Inside Climate News A larger commission will apply the process, because Alabama expands it from three members to seven beginning in 2027. WBHM
Tomorrow’s topic
The federal court dismissal of the DC Blox challenge to Nashville’s data center moratorium.