Southern's Subsidiary Signs Long-Term Power Agreement With OpenAI

SO's Georgia Power Secures Landmark AI Infrastructure Deal

The agreement marks another major milestone for Southern Company as demand for electricity from hyperscale data centers continues to accelerate. SO’s unit, Georgia Power, will supply electricity to OpenAI's planned facility in Effingham County, located roughly 45 minutes outside Savannah. The data center will support OpenAI's expanding AI operations, requiring one of the largest electricity commitments ever announced for a single AI campus.

The investment is expected to create thousands of construction and permanent jobs while contributing billions of dollars to the local economy. Beyond direct employment, the project is likely to generate opportunities for local contractors, suppliers and service providers, delivering lasting economic benefits across the region.

For SO, the agreement further strengthens its reputation as a preferred utility partner for large-scale industrial and technology investments requiring reliable, long-term power solutions.

OpenAI Will Cover Infrastructure Costs to Protect Customers

A key feature of the agreement is its customer protection framework. OpenAI has agreed to pay the full cost of the electric infrastructure necessary to serve its new facility while also meeting long-term energy contract requirements and providing financial assurances.

This structure aligns with the updated rules approved by the Georgia Public Service Commission in January 2025. The revised regulations were designed to accommodate rapidly growing electricity demand from hyperscale data centers and other large industrial users without increasing costs for residential customers or small businesses.

By requiring large-load customers to fund their own infrastructure, SO continues its strategy of supporting economic development while maintaining affordable electric service across Georgia.

OpenAI's 3,200-MW Facility Highlights Rising AI Power Demand

OpenAI's planned campus is expected to require approximately 3,200 megawatts (“MW”) of electricity, making it one of the largest AI-powered data center projects currently under development in the United States.

The rapid expansion of AI has dramatically increased electricity consumption as advanced AI models require enormous computing capacity supported by thousands of high-performance processors operating around the clock. Utilities across the country are preparing for unprecedented growth in electricity demand driven by cloud computing, machine learning and generative AI applications.

SO's diverse generation portfolio and extensive transmission network position it to support these large-scale energy requirements while maintaining reliable service for customers throughout Georgia.

SO Secures One of the Largest Demand Response Agreements

One of the most notable aspects of the agreement is OpenAI's commitment to provide up to 1,000 MW of flexible demand response, making it one of the largest single-facility demand response commitments in the country.

Under the 25-year agreement, Georgia Power will have the ability to temporarily reduce electricity supplied to the OpenAI facility during periods of exceptionally high system demand. Rather than operating at maximum capacity continuously, the data center can lower its electricity consumption when requested to help maintain the stability of the electric grid.

This flexibility offers significant operational advantages. It strengthens grid reliability during peak demand periods, reduces strain on transmission infrastructure and enables Georgia Power to defer investments in additional power generation resources that would otherwise be required to meet future electricity demand.

As a result, the agreement is expected to support long-term savings while improving system reliability for all customers.

SO Continues Managing Georgia's Rapid Growth

Georgia has experienced significant population growth and increasing investment from technology companies, manufacturers and logistics businesses over the past several years. This economic expansion has steadily increased electricity demand across the state.

SO has worked closely with state regulators to proactively plan for this growth through comprehensive long-term resource planning and careful evaluation of large-load contracts. Each major electricity agreement undergoes a detailed review to ensure that new projects support economic development without placing unnecessary financial burdens on existing customers.

This disciplined approach allows Georgia Power to accommodate major industrial investments while preserving affordability and maintaining reliable electric service.

OpenAI Project Brings Long-Term Economic Benefits

Beyond strengthening Georgia's AI infrastructure, the OpenAI project is expected to deliver substantial economic benefits to Effingham County and surrounding communities.

Construction activities will generate significant employment opportunities and increase demand for regional suppliers and contractors. Once operational, the facility will support highly skilled technology jobs while attracting additional investment from businesses seeking proximity to advanced digital infrastructure.

The project also enhances Georgia's reputation as an emerging hub for artificial intelligence, cloud computing and next-generation technology development, positioning the state to compete for future hyperscale data center investments.

SO's Customer-First Strategy Remains Central

Southern Company continues emphasizing that growth from large industrial customers should benefit all Georgia Power customers. By requiring OpenAI to finance its infrastructure and commit to long-term contractual obligations, the utility minimizes financial risk while supporting responsible economic development.

The company's broader regulatory strategy has also contributed to customer-focused initiatives, including an earlier base-rate freeze and a plan expected to provide approximately $102 in annual savings for the typical residential customer beginning in 2029.

These measures demonstrate SO's commitment to balancing infrastructure expansion with affordability and customer value.

SO Strengthens Its Position in the AI Energy Revolution

The long-term agreement between SO's Georgia Power and OpenAI demonstrates how utilities can successfully support the explosive growth of AI while maintaining grid reliability and protecting customers.

With OpenAI funding all required infrastructure, committing to a 25-year electricity agreement and participating in one of the nation's largest demand response programs, the partnership establishes a model for future AI infrastructure developments across the United States.

As AI continues driving unprecedented electricity demand, Southern Company is positioning itself as a leading energy provider capable of supporting next-generation technology investments while delivering economic growth, enhanced grid stability and long-term value for Georgia communities.

SO’s Zacks Rank and Key Picks

Currently, SO carries a Zacks Rank #3 (Hold).

Investors interested in the utility sector might look at some better-ranked stocks like American Electric Power Company, Inc. AEP, Duke Energy Corporation DUK and MGE Energy, Inc. MGEE, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

American Electric Power is worth approximately $70.99 billion. The company is one of the largest regulated electric utilities in the United States. American Electric Power provides electricity to millions of customers across 11 states through a diverse generation and transmission network.

Duke Energy is worth approximately $98.16 billion. It is one of the nation's largest energy holding companies. Duke Energy supplies electricity and natural gas to residential, commercial and industrial customers across the Southeast and Midwest.

MGE Energy is worth approximately $2.97 billion. It is a public utility holding company. MGE Energy generates and distributes electricity and natural gas, primarily serving customers in and around Madison, WI.

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