The Other, Other Big Race in Georgia This Year

Robinson Meyer

This episode of ShiftKey is brought to you by Heatmap Pro. You already rely on Heatmap for daily reporting and commentary on the energy transition. That's why you listen to this show. Well, Heat Map Pro brings all of our research, reporting and insights down to the local level. It's a software platform that tracks all local opposition to clean energy projects and data centers. It forecasts community sentiment and it guides data driven engagement campaigns. Go to heatmap News Pro to book a demo and see the premier intelligence platform for project permitting and community engagement. That's heatmap News Pro. Good morning. It's Thursday, June 11 and there are important state level races coming up later this year in Georgia. I'm not talking about the governor's race, nor am I talking about the Senate

Interviewer/Co-host

election, although both could shape the 2028 presidential field significantly.

Robinson Meyer

I'm talking, of course, about the Georgia Public Service Commission, which regulates the state's utilities. Last year, you might recall if you're a nerd, Democrats pulled off their biggest state level win in 20 years in Georgia when voters elected Peter Hubbard and Alicia Johnson to Georgia's Public Service Commission. It was the first time Democrats had won a state level office in Georgia since 2006 and they did so by a massive margin with 63% of the vote.

Interviewer/Co-host

Though it was an off year race

Robinson Meyer

that gave the Georgia Public Service Commission a 3:2 Republican split. But that could change this year. The commission's crucial fifth seat is up for grabs in another election and Peter Hubbard last year only won a one year term. He has to win re election this year if he does. And if Democrats take that fifth seat though, they could lead the Georgia Public Service Commission for the first time in decades. So on today's show, I'm excited to welcome. Who else? Peter Hubbard. He is, as you know, a current member of the Georgia psc. He's a one time renewables developer and he's the founder of the nonprofit Georgia center for Energy Solutions. Now I should say I realize most shift key listeners don't live in Georgia,

Interviewer/Co-host

although hello to those of you who do.

Robinson Meyer

But I think this is an interesting conversation just for anyone in the United States or for anyone who cares about the American energy system. You know, every state has a Public Service Commission and although only 10 are directly elected by the voters like in Georgia, these are crucial roles shaping how the energy system works in the United States. And with Peter, we had a really interesting conversation. We talked about what public service commissioners actually do, what their lives are like, and how they're grappling with the challenges of load growth, the clean electricity buildout, and the data center boom. So today it's Peter Hubbard, current utility regulator and utility regulator candidate in the great state of Georgia. I'm Robinson Meyer, the founding executive editor of Heatmap News, and it's all coming up on ShiftKey. Peter Hubbard, welcome to ShiftKey.

Peter Hubbard

Happy to be here, Rob.

Robinson Meyer

So you have played a number of

Interviewer/Co-host

different roles in the energy system. I think you've been an advocate, you were an intervener in Public Service Commission proceedings.

Robinson Meyer

You were a developer, you led an advocacy organization. And then, of course, crucially, you won

Interviewer/Co-host

this big statewide election last year as one of the first Democrats to win a statewide election in Georgia in quite some time.

Robinson Meyer

Can you just start by maybe giving

Interviewer/Co-host

us the story of how you got here? What did you do along the way to becoming a Georgia Public Service commissioner?

Peter Hubbard

Well, you could trace it all the way back to graduate school. I went to Johns Hopkins, took a class on oil and gas markets, and something clicked in me that said, this is what I would like to do. I'd really like to study energy. If I want to understand how to transition to clean energy, then I need to understand the system we have. So I jumped into a consulting firm, Siemens Energy Business Advisory, and worked there for close to a decade. Perfect experience in terms of just really getting into the weeds. I did a lot of capacity expansion, production cost modeling. I ran a natural gas model and really got to understand electricity and gas markets from the ground up. And then with the three years of developing, what I did was try to capitalize on the IRA and follow Jigger Shaw's message of deploy, deploy, deploy and get out and really understand how to make a project successful or understand why it fails in terms of solar and battery storage development, going through interconnection, going through, frankly, negotiating with landowners and trying to tell them about the benefits of solar and battery storage.

Interviewer/Co-host

So, and where were most of your projects during that period? Were they in Georgia or were they all around in maybe more open markets?

Peter Hubbard

I really focused on three markets, the Mid Continent ISO, the Southwestern Power Pool, and then ercot. So right in the center part of the country. You know, that experience was just hands on and really taught me all of the nuances of, you know, the commercial side, the technical side, the political side of bringing projects successfully there. And then I tied it all together by having moved to Georgia a decade ago and looking at how we did integrated resource planning in the state. It just made me want to jump into the ring and try and provide comments through the expert witness path, because I really believe in building up that evidentiary record with good solid analysis. And there's just overwhelming amounts of analysis that suggest going in the direction of clean energy is the right direction. Not the least of which is that 90% plus of what's going to be built this year in the United States and worldwide is solar, wind and batteries. So it just makes sense from a lot of different perspectives. And I'm interested in trying to unlock how to move forward with more of clean energy.

Interviewer/Co-host

And now that you're a public service commissioner, what is your day to day like? Because of course, like we all think about public service commissioners all the time, it's a very important part of how utilities are regulated. But what is the actual day of a commissioner like?

Peter Hubbard

Well, my circumstance is unique. I only earned a one year term, so I'm wearing two hats this year. I'm both a commissioner and a candidate and each one of those is a full time job as well as being a full time dad as well to two children. But the day to day, frankly, if you wanted to do the least amount of work possible, you could just show up every other Thursday to committee meetings and vote up or down, and show up every other Tuesday to admin meetings and vote up or down. You really don't have to engage all that much. But if you're like me and really read everything that comes across your desk and want to get to the bottom of things, then it's truly a full time job. So a lot of it is meeting with stakeholders. A lot of it is understanding the dockets and really reading through the testimony that comes in, interacting with staff. There's a lot that can be and really just trying to understand, you know, what has come before me at the commission, what's coming up, for example, the 2028 Integrated Resource Plan in Georgia and the rate case that follows and preparing for things like that. So, you know, I really try and keep myself busy wearing both of those hats this year.

Interviewer/Co-host

What surprised you most about being commissioner so far?

Peter Hubbard

Well, probably what surprises me most is how dependent commissioners tend to be on staff to do the hard analysis and then present solutions. I'm the kind of person that can arrive at my own conclusions and come up with my own suggestions of where I think we should go. But really commissioners tend to not be experts in their field. I'm a rare bird in that I've done this work specifically working on integrated resource planning with other utilities, but we're really dependent on staff. So that's been surprising as well. As I would say, just how entrenched interests are. This is a state that's been under one party control for a long time. And while that's changing, there's just a certain way of doing business. And I hear frequently this is the way we've always done things. And to me that's surprising as well and not really an acceptable answer.

Interviewer/Co-host

What's an example?

Peter Hubbard

Well, one is that the power company expects to collect full revenue requirements on really everything that they do, even on an individual basis, for example, storm cost recovery. So we had a docket a few weeks ago that concluded about the $912 million request to cover storm damage costs. And I put forward a motion to try and reduce that request and not have full revenue requirements, including profit on top of storm cost recovery. But that motion failed because the suggestion was, well, we've always had full revenue requirements on money that we spend, including on storm cost recovery, but those costs are increasing with more frequent and powerful storms. And that was something I questioned and I think deserves more scrutiny going forward.

Interviewer/Co-host

In other words, basically because there's now going to be more storms, it's kind of more opportunities to do storm cost recovery and therefore more opportunities for utility profit. Is that the link?

Peter Hubbard

Yes, that's right. That's a vicious cycle going on, in my opinion.

Robinson Meyer

So I want to talk about a few things here.

Interviewer/Co-host

Georgia's facing a number of different challenges, some unique to Georgia's situation, some that I think a lot of different states are facing, some of which you campaigned

Robinson Meyer

on last year and are campaigning on now.

Interviewer/Co-host

So let's talk about data centers. Centers. Last year, at the very end of the year, the Georgia Public Service Commission approved Georgia Power to buy almost 10 gigawatts of new capacity, basically about 3.6 gigawatts of which is from entirely new natural gas generation, entirely to serve new data center demand. And so there's a huge amount of new data center demand coming online in Georgia. How should the state handle this huge amount of data center demand coming online? And maybe like what did you think

Robinson Meyer

was going to happen when you joined? What did you campaign on versus what

Interviewer/Co-host

has getting in the weeds actually kind of taught you about this bolus of demand coming online?

Peter Hubbard

Yes, data centers are just the issue of the day and they're not going away anytime soon. And people are very concerned about it, really from all stripes of life. So you ask what should the state be doing about it? And I advocate for a whole of government approach because while the Public Service Commission really only has oversight over the power side of things where power comes from and how much data centers are paying on their tariff. There's much larger issues in terms of water use, in terms of the tax incentives. The estimate is three and a half billion in tax abatements this year in Georgia. Uncollected revenue that data centers otherwise would be willing to pay and land use issues and so on and so forth. So in my opinion we really need a whole of government approach. And I would say though that you know, data centers are also an opportunity in a sense. I'm someone who is pragmatic and I also see that these are deep pocketed and folks who can bring investment to the grid and if we target those investments to generational improvements, things like transmission and building the right power sources, then I see that having a really beneficial effect short term, long term in Georgia. And so I've been interested very much in things like data center load flexibility and how can we bring some of these folks online and bring their revenues into the state more quickly and do it in a way to where we're not necessarily building brand new gold plated infrastructure, but using more of the grid that we've already invested in. And that's, that's a critical piece that I would like to advance on and have made strides in that way. But you know, we, we really need to bring the utility on board as well as the rest of the government.

Interviewer/Co-host

When you talk about making data centers kind of pay their fair share or be fair participants in the power system, what does that mean to you?

Peter Hubbard

Yeah, super complicated question and I don't

Robinson Meyer

have the full answer yet. But it's funny because it's, it's objectively,

Interviewer/Co-host

I think what everyone wants. But it's actually so complicated because to some degree the grid is this machine that we all share and all use together. And that disentangling what it could mean is actually quite a technical and difficult thing.

Peter Hubbard

It's incredibly technical. There's a notice of proposed rulemaking that ferc, the Federal Energy Regulatory Commission is I believe going to be issuing some guidance on what they see is that question of what, what should a data center pay on their tariff to make sure it's their fair share? I'll be monitoring that. I look a member of the national association of Regulatory commissioners and all 50 states have commissions that are grappling with this question. So I'm looking at other states tariffs and what they're doing. Well and not. But specifically some things came out in the Washington, Georgia in the fuel cost recovery docket that concluded last month in May of 2026. Specifically, things like data centers are really 100% on a real time pricing tariff. And that real time pricing tariff does not include firm transportation costs for pipelines. So if we're building 3.6 gigawatts of new gas fired generation, those pipeline costs are not yet accounted for by data centers. And the company rebutted that saying, well, they're paying on the other side of the equation in terms of demand, not energy. And we'll show you those numbers in 2028 in the rate case that we never had last year because for political reasons it was paused. So pipelines, the hedging program, energy from solar power purchase agreements and income qualified fuel discounts, these are all things that are not accounted for yet and being paid for by data centers, including the fact that we're now demanding more natural gas for generation. And you can literally do the modeling of the counterfactual of what if we pulled out that demand and prices would be 5 to 11% lower.

Interviewer/Co-host

So in other words, Georgians are paying either for higher bulk power prices from existing natural gas fleets, or if they take natural gas at their home via pipelines for their furnace or heater, whatever, then they're also paying higher natural gas prices, basically because the data centers are now competing with them in the system for gas.

Peter Hubbard

I would at least go so far as to say that they're competing in terms of a lot of our electricity comes from gas fired generation and so they're going to pay a higher price for that electricity.

Interviewer/Co-host

You mentioned this pipeline issue that isn't fully accounted in the rate case. Can you give a little more explanation of how that works?

Peter Hubbard

Exactly right. So for a combined cycle unit that's going to be operating at say 60 or 70% capacity factor, you need to have firm transportation, so reserved pipeline capacity and that's expensive to put steel in the ground.

Interviewer/Co-host

And this is basically guaranteed that there's a guarantee that there will always be gas available, that at that turbine to run, guaranteeing that there will always be gas available, the turbine to run means building new pipelines.

Peter Hubbard

Basically yes. Although you can have operational flow orders and other reasons why that gas can't be delivered. So then you have to build backup diesel for that or some kind of backup fuel. But those pipeline costs are actually being incurred even before those gas fired generators can take that. So we're going to be paying for capacity beginning in 2027 and just hope that we can find someone to that capacity to for a few years until those gas fired generators come online. It's worth hundreds of millions of dollars. And it's a cost that is not included in real time pricing, which is a tariff that data centers have access to and basically provides a lower kind of cost because they're using a large amount of energy. So it's just, you know, and we'll get into the details in the next rate case in 2028. But, but we did not have a rate case in 2025. The last time we had one was in 2022. And that's a there are certain studies that come out of those rate cases, like a cost allocation study and a cost of service study. And we didn't get those last year. So who's to say that they're paying their fair share? We have to take the word from the utility right now.

Interviewer/Co-host

So I want to talk about the big nuclear plant that was built in Georgia over the past few years.

Robinson Meyer

And I actually want to start with

Interviewer/Co-host

the national perspective because I, you know, Vogel units 3 and 4 were recently completed in Georgia. They were enormously expensive to complete. And I will say outside of Georgia, the way that these projects are discussed is as, you know, thank goodness Georgia finished those two nuclear plants.

Robinson Meyer

Like thank goodness they did it because the whole country learned a lot from

Interviewer/Co-host

watching Georgia have the experience to develop these two what became enormously expensive nuclear plants. To the extent that the Trump administration is now trying to build 10 new nuclear plants across the country and believes it can do so in a cheaper way, it's doing so entirely on the back of lessons learned from the Georgia

Robinson Meyer

process, lessons that I should say seem

Interviewer/Co-host

entirely reasonable to me, including a lot of the delays in Georgia came from the fact that equipment wasn't ready or it was ready too early. And so it kind of sat around and therefore it incurred costs as it sat around or workers had to sit around while they waited for equipment to be delivered.

Robinson Meyer

Anyway, all of this is to say here in the other 49 states we go thank goodness Georgia finished these projects because it was a real gift to the just our understanding of how to

Interviewer/Co-host

complete a large scale nuclear project in the 2000s and 2000 teens. And if we continue to build big new reactors, we're going to learn a lot from that experience.

Robinson Meyer

I wonder, though, what your takeaway is about them or how you interpret them as a Georgia public service commissioner, because

Interviewer/Co-host

those projects got rate based and so Georgia utility customers are paying for them right now.

Robinson Meyer

And so I would imagine the response

Interviewer/Co-host

to them has been quite different in Georgia.

Robinson Meyer

And I almost wonder if you want

Interviewer/Co-host

to kind of give us What. Now that you're fully in house at the psc, just what your perspective is on that project?

Peter Hubbard

Well, if you look at the context of how Vogel Units 3 and 4 came about, they were proposed, you know, around 2008, 2009, around that time frame, or actually, I believe they began construction around that time. But it was also around the time when the Georgia Consumer Utility Council, that independent body that intervenes in dockets to say, hey, this is what we, you know, we think this is in the interest of ratepayers or no, this is going to be a very expensive power project. We didn't have that independent voice. And so.