Today’s Courier Herald Column:
Georgia Power and its armada of Atlanta lobbyists spent much of this session of the General Assembly convincing lawmakers that a bill which would expand private production of solar power in Georgia as an abomination. Despite 45 other states having similar laws, Georgia lawmakers who spent this session with a theme of “competitiveness” with neighboring states decided to take the word and nebulous excuses of Georgia Power that expanding solar power would be dangerous and costly.
Solar power created under the proposed bill would not be a substitute for “base” power – the kind of power that must be available 24 hours a day, 7 days per week. Instead, it represented additional capacity for “peak” power. That’s when demand for electricity spikes with heavy use, often during the heat of summer days when air conditioning use strains existing infrastructure. Those are the same kinds of days when the sun shines bright, and solar power could easily be a cheap, pollution free alternative to peak electricity production.
Having sufficiently thwarted attempts to expand solar use, Georgia Power was before the Public Service Commission on Tuesday formally requesting to decommission two active coal powered plants plus an additional oil powered plant which hasn’t been operated since 2009. The plants are among Georgia Power’s oldest and worst with respect to pollution. Because of new environmental standards imposed by the Obama administration, they have been deemed cost prohibitive to bring into compliance and will be scrapped.
Georgia Power does not plan for additional capacity to be added to its grid until late 2016 or 2017, when the new nuclear powered units at Plant Votgle are expected to come online. In the mean time, Georgia Power must purchase additional capacity for peak periods from other vendors, at a cost.
During the same meeting, the PSC approved three of four proposed contracts to purchase electricity produced from natural gas in 2015 from other power generating companies. Natural gas is a preferred fuel for peak power because it can be turned on and off quickly as needed, is relatively plentiful, and burns cleaner than coal. The price of natural gas is also known to swing widely, however, making it difficult to predict the exact cost for long term planning purposes.
Georgia Power will be allowed to charge customers a fee of $2.30 per kilowatt hour for extra fuel purchased, so the cost of purchasing power plus a profit margin is passed along to the consumer. Georgia power also makes a fixed rate of return on investment for all productive power plants. What Georgia Power does not get paid for is the investment that private individuals make in solar powered equipment to produce power on their own property.
Regulating a monopoly is a tricky affair. It is a company owned by private investors. Private investment is required to build and maintain an adequate infrastructure to support any customer, large or small, every time they flip a switch. These companies must plan years in advance, guessing on growth patterns and power needs far into the future.
Tuesday’s contracts dealt mostly with the amount of peak power Georgia Power thinks it will need 3 years or more from now. So it is understandable that adding an additional variable of increased power supply from individuals can cause consternation from not just Georgia Power, but from regulators who must decide how much capacity to allow Georgia Power to build and how much to allow them to purchase as contingencies.
The problem with this equation is that too many of these decisions are now being made by the legislature, usurping the elected Public Service Commission and the staff of professional full time energy and utility experts.
A well timed gift of NASCAR tickets or a decent steak dinner can swing a vote in the legislature in favor of a “good corporate citizen” making the Public Service Commission’s opinion irrelevant. One of the many travesties in Senate Bill 31 from a few years ago that the decision of how to pay for two new nuclear power plants, and more importantly, who would pay for that plant, was taken from the PSC and decided by legislators under the heaviest lobbying offensive seen in recent memory.
The decision to block individual solar production to protect Georgia Power at the expense of individual rate payers continues this tradition. Georgia Power is also the signature beneficiary of the tax reform plan unveiled and hastily passed this week. The 2012 session of the Georgia General Assembly has done nothing if not reinforce the belief that the legislature is owned by Georgia Power.
The Public Service Commission has agreed that Georgia Power will have to purchase additional capacity in coming years to meet the needs of Georgians. The most expensive cost of purchasing power for individual residential and small business consumers, however, is the cost of power that Georgia Power continues to purchase from the General Assembly.