Electricity demand is rising sharply across the Southeast as data center expansion accelerates, boosting revenues and prompting new infrastructure investments at Southern Company.
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The utility reported a 2.3% year-over-year increase in retail electricity sales for the first quarter of 2026, driven largely by a surge in power consumption from data centers. According to company officials, data center energy use jumped 42% compared to the same period last year.
“The 2.3% growth represents the highest total retail sales growth that we’ve seen in the first quarter in recent history,” said David Poroch. “The commercial class grew 4.5% in the first quarter when adjusted for weather, bolstered by ongoing growth in data centers.”
Southern Company’s growth is underpinned by a rapidly expanding pipeline of large-load customers. The utility currently has 28 major projects under contract, representing a combined 11 gigawatts of capacity — up from 26 projects totaling 10 GW at the end of 2025.
Beyond signed agreements, the company is finalizing an additional 6 GW of large-load projects and tracking a prospective pipeline of 75 GW, reflecting sustained demand from energy-intensive industries.
“We continue to see incredible momentum and tangible interest for power from large load customers,” said Chris Womack.
To support this growth, the company is investing heavily in infrastructure. Its largest subsidiary, Georgia Power, increased capital expenditures to more than $2 billion in the first quarter, up from $1.6 billion a year earlier.
The utility recently filed a request with regulators seeking between 2 GW and 6 GW of new capacity, including thermal generation, energy storage systems, battery storage and renewable energy resources.
Southern Company is also leveraging federal support to expand grid capacity and reliability. In February, the company closed on a $26.5 billion loan agreement with the U.S. Department of Energy to finance major energy infrastructure projects.
The funding will support the development or upgrade of more than 16 GW of firm, reliable power, including 5 GW of new natural gas generation, 6 GW of nuclear capacity through uprates and license renewals, as well as hydropower modernization, battery storage and over 1,300 miles of transmission upgrades.
In addition, the company plans to add 400 megawatts of capacity through turbine upgrades at existing gas plants in Alabama and Georgia, with an estimated cost of $700 million and projected completion between 2029 and 2031.
Executives said they are also evaluating an additional 300 MW of natural gas upgrades as part of their long-term planning.
While interest in nuclear energy continues to grow, Womack noted the company is not yet ready to commit to new reactor construction.
“We’re going to continue to share the experiences that we gain from Vogtle Units 3 and 4,” he said. “But I’m very thrilled and very excited about the conversations and the commitments and the actions that are being taken, particularly around doing more around AP1000s with a group of companies.”
As electricity demand from data centers and other large-load customers continues to rise, utilities like Southern Company are accelerating investments in generation, transmission and storage to maintain grid reliability and support long-term growth.
Originally reported by Diana DiGangi, Reporter in Utility Dive.
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