What Alabama’s Gas Plant Fight Says About Green Tech

Most Alabama households already pay some of the highest power bills in the country, and now they’re being asked to bankroll a $622 million fossil fuel plant—just as clean energy and AI-powered grid tech are becoming cheaper and more available.

That tension sits at the center of Alabama Power’s move to delay (not cancel) a rate hike tied to its new Lindsay Hill natural gas plant. On paper, the utility is offering relief: pushing a roughly $3.32 per month increase for the average customer out to 2028 and freezing some other rate components through 2027. But the reality is more nuanced—and it’s a perfect case study in how traditional utility planning is colliding with green technology, data centers, and public pressure.

This matters because every dollar sunk into long-lived gas infrastructure today is a dollar that isn’t going into solar, storage, efficiency, and smart grid systems tomorrow. And for businesses trying to grow in a low-carbon direction, the way their local utility invests will either support or choke their sustainability goals.

In this post, I’ll break down what’s happening in Alabama, why watchdogs are skeptical, and how green technology and AI offer a better playbook—for utilities, regulators, and energy users who are tired of watching their bills creep up.

What Alabama Power Is Actually Proposing

Alabama Power’s proposal is straightforward on the surface: the utility wants to delay, not erase, certain bill increases tied to its new gas plant and related costs.

Here are the core pieces:

• The utility bought the 895‑megawatt Lindsay Hill Generating Station for $622 million.
• The approved rate increase to pay for that plant, around $3.32 per month for the average residential customer, was set to start January 2027.
• Alabama Power now wants to push that increase to January 2028.
• It also proposes to hold environmental compliance costs and the fuel cost factor flat through 2027.

To make this math work, the company is asking regulators for two key flexibilities:

• Permission to redirect potential customer refunds in 2026 into a natural disaster reserve fund instead of giving them back directly.
• Use of federal nuclear production tax credit funds to offset retail customer costs in the near term.

On the surface, that sounds customer-friendly: more rate stability at a time when everything else—from rent to groceries—is going up. But, as several advocates have pointed out, this is a deferral strategy, not a discount.

As Daniel Tait of Energy Alabama put it, “The fine print shows it’s a deferral strategy, not a reduction.”

The costs of the gas plant and other system investments don’t disappear; they just show up later on your bill.

Why Advocates Call It a Shell Game, Not Relief

Energy justice advocates and clean energy lawyers are raising a red flag for two reasons: transparency and long-term cost.

1. Customers still can’t see what they’re paying for

Alabama Power bills are made up of multiple rate schedules and riders, and only some of them are addressed in this delay proposal.

Christina Tidwell of the Southern Environmental Law Center highlights the core issue: people can’t tell which parts of their bill are frozen and which parts can keep rising.

A truly transparent bill would:

• Break out base rates, fuel costs, environmental compliance charges, and riders.
• Show how much each category contributes to the total monthly bill.
• Disclose how new infrastructure—like a $622 million gas plant—flows into those charges.

Without that clarity, a “rate freeze” headline can obscure the fact that overall bills could still increase, especially if usage rises or other charges shift.

2. The deferral keeps customers chained to gas

Deferring costs locks Alabama into paying for this gas plant for decades. That’s a strategic problem when:

• Solar, wind, and storage costs have dropped dramatically over the past 10–15 years.
• Energy efficiency and demand response can reduce peak demand for a fraction of the cost of new generation.
• AI-driven grid optimization can shave peaks and shift loads without building as many new fossil assets.

In other words, the rate design is quietly steering money away from green technology and into a fossil asset that could easily be underutilized or stranded long before it’s paid off.

I’ve seen this same pattern in other regions: short-term “rate stability” becomes the talking point, while the long-term obligation to pay for gas infrastructure crowds out investment in cleaner, smarter options.

The Data Center Boom: Excuse for Gas or Catalyst for Green Tech?

The other big player in this story is the data center boom—especially AI and cloud facilities that devour electricity.

Alabama is now competing to attract large data centers, promising jobs and investment. But these facilities can require hundreds of megawatts each, which spooks utilities into building more capacity fast.

The question is how to serve that demand.

The political pressure is real

• Alabama Power’s residential customers already face some of the highest total electric bills in the nation, driven by slightly above-average rates and very high usage.
• U.S. Sen. Katie Britt has said she wants guarantees that data center costs aren’t dumped on everyday customers, calling current rates in the Southeast “unacceptable.”
• New PSC President Cynthia Lee Almond has warned that in other states, residential and small business customers ended up subsidizing big tech infrastructure, and she doesn’t want that in Alabama.

So utilities are in a tough spot: they want the new load from data centers, but they don’t want to be seen as socializing the costs.

There’s a smarter way to serve data centers

Here’s where green technology and AI aren’t just buzzwords—they’re tools that make the “build a big new gas plant” response look lazy.

Modern data centers can:

• Sign long-term contracts (PPAs) directly with solar, wind, and storage projects.
• Use AI to schedule flexible computing workloads for times when renewable power is plentiful.
• Participate in demand response, backing off load during grid stress and getting paid for it.
• Install on-site solar plus battery storage to reduce their peak draw from the grid.

From a grid planning perspective, utilities can:

• Use AI-powered forecasting to predict peaks and align flexible loads rather than overbuilding gas.
• Invest in non-wires alternatives: targeted efficiency upgrades, distributed solar, batteries, and voltage optimization instead of more steel in the ground.
• Offer time-of-use or real-time pricing to align data center operations with low-cost, low-carbon supply.

The reality? You don’t need to reflexively buy an 895‑MW gas plant every time a hyperscale data center breaks ground. With the right planning and green tech, much of that capacity can be covered with cleaner, cheaper, and more flexible resources.

How Green Technology Could Change Alabama’s Playbook

Alabama’s situation is a textbook example of why old-school, fossil-heavy planning doesn’t fit a modern grid. There’s a better way, and it leans heavily on green technology and smart data.

1. Use AI and advanced analytics for integrated resource planning

Instead of treating demand growth and new load (like data centers) as an automatic trigger for gas, regulators can push for integrated resource plans (IRPs) that:

• Model energy efficiency as a resource, not an afterthought.
• Compare gas against portfolios of solar, wind, storage, and demand flexibility.
• Incorporate carbon costs and climate risk, not just fuel prices.

AI can crunch historical load data, weather patterns, and economic trends to prepare more accurate demand forecasts and stochastic scenarios. That means less “we might need it just in case” gas capacity and more targeted investment in resources that actually get used.

2. Make bills radically transparent

Utilities and regulators that are serious about fairness and trust should push for itemized, intelligible bills. For example:

• Show a line item for fuel costs (with historical comparison).
• Break out environmental compliance and explain what it funds.
• Identify major capital projects (like Lindsay Hill) and how much they add to the monthly bill.

Digital tools and AI-powered bill explainers can help customers understand:

• Why their bill went up this month.
• What part of the bill is fixed vs. usage-based.
• How specific actions—like reducing peak usage, installing solar, or shifting loads—affect their bottom line.

Once people can see the cost of fossil projects, the economic case for green technology becomes much clearer.

3. Treat demand-side resources as first-class citizens

Instead of defaulting to gas, Alabama Power and similar utilities could:

• Launch ambitious efficiency programs targeted at high-usage homes (Alabama’s specialty).
• Incentivize smart thermostats, water heaters, and EV chargers that can respond to grid signals.
• Support rooftop and community solar bundled with batteries, especially in high-bill neighborhoods.

I’ve found that when utilities actually compare the full lifecycle cost of one more gas turbine to a portfolio of demand-side measures, the spreadsheet quietly sides with green tech—especially when fuel price risk and carbon risk are included.

What This Means for Businesses and Communities Right Now

If you’re a business, local government, or just a household watching your power bill, Alabama’s story offers some very practical lessons.

For businesses and data center developers

• Don’t settle for opaque tariffs. Ask for clear breakdowns of what you’ll pay and how your project affects system costs.
• Tie your growth to clean energy. Structure contracts that pair your load with renewables and storage. That makes you a partner in decarbonization, not a scapegoat.
• Use AI in your operations. Flexible computing, smart HVAC, and storage management reduce both emissions and exposure to future rate hikes.

For cities, advocates, and households

• Push for bill transparency. If you can’t see what you’re paying for, you can’t fight unfair increases or demand better planning.
• Engage in utility commission dockets. Decisions like the Lindsay Hill rate deferral happen in Public Service Commission proceedings, and public comments do matter.
• Adopt your own green tech. Smart thermostats, efficient appliances, rooftop solar, and batteries give you more control when utility decisions go sideways.

The bigger point: when communities organize around fair rates and clean energy, utilities respond. Alabama Power’s decision to propose a delay itself is a response to public outcry over high bills and high profits. That’s not accidental.

Where the Green Technology Story Goes From Here

Alabama’s fight over a single gas plant might look like a local skirmish, but it’s part of a much larger trend: utilities doubling down on fossil assets while customers, regulators, and new industries are shifting toward cleaner, smarter options.

The choice is pretty stark:

• Keep building long-lived gas plants, smoothing the optics with temporary rate deferrals; or
• Use green technology, AI, and modern planning to serve new load, cut emissions, and keep bills more stable over the long haul.

For a Green Technology series, this is the core message: tech isn’t the bottleneck anymore. The bottleneck is governance, transparency, and the willingness to change a comfortable business model.

If your organization wants to grow in a low-carbon direction—whether you’re planning a data center, scaling manufacturing, or running a municipal system—now’s the moment to press your utility and regulators for:

• Clear, data-backed planning that compares gas to clean portfolios.
• Transparent billing and fair allocation of data center costs.
• Aggressive use of AI and digital tools to reduce peaks instead of just building more fossil capacity.

Alabama Power’s proposal is a reminder: rate hikes can be delayed, but the bill for outdated planning always comes due. The smart move is to change the plan.