Fossil Fuels Key Issue as PSC Decides Georgia Power Capacity Expansion

Dave Williams

Monday, April 15th, 2024

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Opponents of a request by Georgia Power for a significant increase in electrical generating capacity raised a number of objections to the proposal during several rounds of hearings before state energy regulators.

But their complaints boil down to two issues: who’s going to pay to build that additional capacity and whether Georgia Power should increase its reliance on fossil fuels at a time it could invest more aggressively in renewable energy.

The Georgia Public Service Commission (PSC) will vote April 16 on the Atlanta-based utility’s request for 6,600 megawatts of additional capacity, up from just 400 megawatts the company forecast it would need just two years ago.

The utility cites an unexpected growth in demand for electricity – particularly among large industrial customers including data centers – as the reason for the request.

“The extraordinary economic development we are seeing in Georgia has created a need for additional generation capacity much sooner than anyone saw coming,” Steve Hewitson, a lawyer representing Georgia Power, told members of the PSC Thursday.

Georgia Power and the commission’s Public Interest Advocacy Staff reached an agreement last month outlining the sources the utility would be allowed to use to produce the additional generating capacity it is seeking.

Representatives of environmental and consumer-advocacy groups – including some that signed onto last month’s agreement and some that didn’t – support portions of the deal that call for expanding battery storage capacity by building projects at Robins Air Force Base near Warner Robins and Moody Air Force Base near Valdosta.

Those projects would generate 500 megawatts of power, down from the 1,000 megawatts Georgia Power proposed. Under the agreement, the other 500 megawatts would come through an expedited request for proposals Georgia Power would issue.

“That’s the energy of the future,” Jennifer Whitfield, a lawyer representing nonprofit Georgia Interfaith Power and Light, said of battery storage. “That’s where we’re headed.”

The agreement between Georgia Power and the commission’s staff also calls for new and expanded distributed energy resources, such as rooftop solar, and demand response initiatives in which customers voluntarily agree to reduce energy use during periods of peak demand.

What the agreement’s opponents don’t like are plans to step up the use of fossil fuels by building three natural gas or oil-fired turbines at Plant Yates near Newnan and entering into power purchasing agreements (PPAs) for oil and gas from Mississippi Power – a sister company of Georgia Power – and Florida-based Santa Rosa Energy Center LLC.

Opponents argued Thursday that neither the Plant Yates project nor the PPAs are needed at this time.

“It was well established by multiple witnesses in the record (of previous hearings) that the decision on these units (at Plant Yates) can wait until … next year,” said Bryan Jacob, solar program director for the Southern Alliance for Clean Energy.

“(The PPAs) start before there’s an actual need in the system,” added Curt Thompson, a former state senator representing the Georgia chapter of the Sierra Club.

How building the additional generating capacity would affect Georgia Power customers’ pocketbooks is the other main bone of contention.

Georgia Power officials say the revenue the new capacity would produce would exceed the costs of building the various projects. Thus, the company is projecting average residential customers would see a savings of $2.89 on their monthly bills from 2026 through 2028.

But Whitfield argued there are no guarantees in the plan.

“We have looked and looked for assurances that residential customers and small businesses will not be the ones subsidizing this request for the 51 (large industrial customers) it’s designed to serve, and we haven’t seen it,” she said.

The Georgia Power plan also is giving Commissioner Lauren “Bubba” McDonald reason to hesitate. He said he won’t vote for any plan that raises rates beyond the 52% increase customers already have seen following several rate hikes in recent years.

McDonald said Thursday that he will make a motion before the April 16 vote to delay implementing the plan until after the November elections, when the political landscape for the next few years will have become clearer.

“I want to know what the future’s going to be beyond October and beyond the early part of November before I can comfortably move on to increasing the capacity needs of the state,” he said.

But Commissioner Tim Echols said he’s plenty comfortable now with the assurances Georgia Power has offered in the agreement.

“This provides an incredible level of protection,” he said. “All the anxiety I had is relieved by this.”

Hewitson noted that seven groups that filed to participate in the case have signed onto the agreement, including some environmental and consumer advocates that have never signed previous agreements between the PSC staff and Georgia Power.

The company is guaranteeing it won’t come back and seek to recover any cost overruns that might occur with the gas projects barring an “act of God” such as a tornado or flood, Hewitson said.

“The company is well aware of the rate increases our customers have had over the last several years,” he said. “It is doing everything it can to minimize any rate pressure on customers.”