A new Alabama law governing electricity use by very large data centers took effect on October 1, 2026. It applies to facilities that need 150 megawatts or more at peak demand within Alabama Power's service territory, a load comparable to the monthly usage of roughly 95,000 average homes.
Under the statute, each qualifying data center must sign a large-load contract that is approved by the Alabama Public Service Commission. The contracts must require the customer to cover the incremental costs tied to its service, including power generation, transmission, fuel, and taxes. They must also show a benefit to other utility customers, such as lower costs, better system efficiency, or economic gains, and they must include billing requirements and minimum contract lengths.
Three large-load contracts have been filed since July 2026. One involves ADC Holdings and a Nebius facility at Oxmoor Valley, which has been approved. The other two were filed by Applied Digital for projects in Tuscaloosa and remain under review.
Much of the information in the public filings has been redacted, including pricing, term length, and minimum billing levels. The commission and the Alabama Attorney General's Office receive unredacted versions, and no public hearing or vote is held on the contracts. Harvard Law School's Electricity Law Initiative and the group Energy Alabama have called for more transparency. Because a residential rate freeze runs through 2029, WBRC reported that it may be difficult for customers to verify whether the promised benefits materialize.
Source: WBRC -- https://www.wbrc.com/2026/10/01/alabama-data-center-law-takes-effect-oct-1-heres-what-it-means-your-power-bill/