Electric Utilities; review by Public Service Commission of certain contracts with large load customers further provided

HB403 ENGROSSED
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HB403
QNGTN14-2
By Representatives Rafferty, Hulsey, Tillman
RFD: Transportation, Utilities and Infrastructure
First Read: 05-Feb-26
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First Read: 05-Feb-26
A BILL
TO BE ENTITLED
AN ACT
Relating to utilities; to add Section 37-4-22.1 to the
Code of Alabama 1975; to provide specific considerations for
the Public Service Commission's review and approval of retail
electric service contracts between a utility and a large load
customer, including determining that such contracts provide
for the recovery of incremental costs and promote other
positive benefits.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 37-4-22.1 is added to the Code of
Alabama 1975, to read as follows:
§37-4-22.1
(a) For purposes of this section, the following terms
have the following meanings:
(1) INCREMENTAL COSTS OF RETAIL ELECTRIC SERVICE. The
additional costs associated with the generation, transmission,
distribution, sale, or furnishing of electricity to a large
load data center customer, including fuel costs and taxes,
which the utility would not incur but for the large load data
center customer contract.
(2) LARGE LOAD CUSTOMER. A customer of the utility
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(2) LARGE LOAD CUSTOMER. A customer of the utility
which has executed a contract for retail electric service with
the utility which requires the utility to serve an expected
total peak demand of 100 megawatts or greater at one or more
contiguous parcels of land.
(3) TERMS AND CONDITIONS. The provisions in a contract
for service between a customer and utility which address
matters such as minimum term for contract length, upfront
payments, security and collateral, and minimum payment.
(b) For purposes of Section 37-4-22(b), a contract for
retail electric service between a utility and a person that
qualifies as a large load customer is consistent with the
public interest where the commission determines that the
contract pricing and contract terms and conditions over the
contract term are expected to:
(1) Provide for the recovery of the incremental costs
of retail electric service to the large load customer's
premises from the large load customer; and
(2) Promote positive benefits to other retail electric
customers of the utility.
(c) The determination of whether a contract between a
large load customer and a utility promotes positive benefits
under subdivision (b)(2) includes considerations such as:
(1) Whether the pricing and terms and conditions of the
contract could lower costs for other residential, commercial,
and industrial customers of the utility; and
(2) Whether the large load customer is expected to
increase the efficiency of the utility's power system.
Section 2. This act shall become effective on October
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Section 2. This act shall become effective on October
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1, 2026.
House of Representatives
Read for the first time and referred
to the House of Representatives
committee on Transportation,
Utilities and Infrastructure
................05-Feb-26
Read for the second time and placed
on the calendar:
0 amendments
................10-Feb-26
Read for the third time and passed
as amended
Yeas 104
Nays 0
Abstains 1
................17-Mar-26
John Treadwell
Clerk
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