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

SB270 ENROLLED
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SB270
YMZ7MN2-2
By Senator Bell
RFD: Fiscal Responsibility and Economic Development
First Read: 05-Feb-26
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SB270 Enrolled
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First Read: 05-Feb-26
Enrolled, 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
data center 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 DATA CENTER 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 150 megawatts or greater at
one or more contiguous parcels of land, meets the definition
of a data processing center under Section 40-9B-3, and
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of a data processing center under Section 40-9B-3, and
operates solely for the purpose of data processing.
(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) Consistent with the commission's authority under
Title 37 generally and Section 37-4-22 specifically, a
contract for retail electric service between a utility and a
person that qualifies as a large load data center 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 data center
customer's premises from the large load data center 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 data center 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 customers of the utility;
(2) Whether the large load data center customer is
expected to increase the efficiency of the utility's power
system; and
(3) Whether the large load data center customer
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(3) Whether the large load data center customer
promotes or contributes to economic growth in the community
where the premises of the large load data center customer is
located.
Section 2. This act shall become effective on October
1, 2026.
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1, 2026.
________________________________________________
President and Presiding Officer of the Senate
________________________________________________
Speaker of the House of Representatives
SB270
Senate 12-Mar-26
I hereby certify that the within Act originated in and passed
the Senate.
Patrick Harris,
Secretary.
House of Representatives
Amended and passed: 08-Apr-26
Senate concurred in House amendment 08-Apr-26
By: Senator Bell
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