Alabama's new law governing data center power costs, Act 2026-610, took effect October 1, and its first test is a transparency fight: the public copies of the utility contracts that decide whether families' bills are affected have the decisive terms blacked out.
The law, enacted as Senate Bill 270, sets state rules for how data center electricity costs are handled. Alabama Power has told regulators its data center contracts will not raise bills for ordinary customers, but the three contracts it has filed this year with the Public Service Commission redact contract length, minimum bills, pricing and even signatories' names, according to a September 30 analysis by Democratic state House nominee Hanu Karlapalem, who is campaigning on the issue in District 4. The analysis also notes the utility has proposed a rate schedule under which contracts would be approved automatically after 45 days without a commission vote.
A further complication is timing: contracts filed before October 1 are reported to be exempt from the new rules under a July agreement between the utility and the commission, meaning the three contracts already on file may sit outside the law that just took effect.
Karlapalem's campaign has called for a one-year moratorium on new AI data center approvals, binding community benefit agreements, environmental review and explicit ratepayer protections. Those are a candidate's proposals, not enacted policy, and the governor's administration and the commission majority have not adopted them.
What is not in dispute is the shape of the problem, which Alabama now shares with Georgia, Virginia, Ohio and every state hosting the AI build-out: industrial-scale power demand arriving faster than the public process designed for it. October 1 gave Alabama a law. The redactions will decide whether the public believes it.
The Public Service Commission's handling of the three redacted contracts is now the live question. If the commission orders disclosure or applies the new law to them, Alabama sets a transparency precedent other states will cite; if the redactions stand, the October 1 law begins life with its largest cases outside its reach, and the legislature will be asked why.
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