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State utility regulators approve Georgia Power plan to use fossil fuels to power data centers

Credit: iStock

by Stanley Dunlap, Georgia Recorder
April 16, 2024

The Georgia Public Service Commission has approved Georgia Power’s controversial updated plans to significantly expand its generation capacity by investing in a heavier reliance on fossil fuels and adding more renewable energy over the next several years.

In a 4-1 vote on Tuesday, state regulators approved Georgia Power’s latest plans to build natural gas or oil-burning generators and solar battery energy facilities in an effort to meet increasing demands from data centers and other large industrial users in the next decade. Regulators were warned by several clean energy groups against allowing Georgia Power to build three fossil fuel burning units at Plant Yates located in Coweta County.

The PSC approved plans that allow Georgia Power to bypass the normal construction bidding process at Yates in order to quickly construct units designed to produce electricity for another 40 years. Georgia Power officials also say the company it will not seek to recover from its customers any construction costs overruns, unless it’s caused by events beyond the company’s reasonable control, such as natural disasters.

Bryan Jacob, Solar Program Director at the Southern Alliance for Clean Energy, said that the failure of Georgia Power and PSC to provide more clean energy options will mean that customers will be squeezed when fuel prices spike.

 Last year, the average Georgia Power residential customer’s bill increased by $15.90 per month for the state’s largest electricity supplier to offset unrecovered fuel costs and to cover new fuel expenses over the next two years.

“Georgia Power customers’ bills have gone up four times since the beginning of last year — with two more increases already approved for the next eight months” Jacob said in a statement. “But that fuel cost adjustment was the largest increase of them all.

“Fossil gas prices may be low now, and that may have lulled the staff and/or commission into a state of complacency,” Jacob said. “But rest assured, fossil gas prices are volatile and they WILL go up again.”

Officials from Georgia Power and the PSC have praised the latest agreement as a way to minimize the financial burden on residential customers while also providing enough resources for the utility to continue providing reliable electricity to several million customers.

Georgia Power is projecting the updated plans will save the typical residential customer about $2.89 on their monthly bills from 2026 to 2028.

“At Georgia Power, our customers are at the center of everything we do, and we are unwavering in our commitment to provide them with clean, safe, reliable and affordable energy,” Aaron Abramovitz, Chief Financial Officer for Georgia Power, said in a news release. “The stipulated agreement benefits all customers, and approval of this agreement will preserve and protect the reliability and quality of electric service our customers expect and support the continued economic development of our state – all while placing downward pressure on rates for all customers.”

The debate over Georgia Power’s utility rates has intensified over the last several years as customers faced hikes in electric base rates and paid for soaring fuel costs, coal ash cleanup and construction overages at Plant Vogtle. The average Georgia Power residential bill will jump a total of $44 a month over two years, including $16 to pay for spikes in methane gas and coal costs.

 The PSC approved Georgia Power’s updated resource plan by a 4-1 vote. The plan is typically updated every three years, but the timetable for this year’s proposal came less than two years after the PSC considered the company’s most recent resource plan.

Commissioner Lauren “Bubba” McDonald cast the lone vote against Georgia Power’s updated plans.

Commissioner Fitz Johnson said Tuesday that in an off-cycle year, it is uncommon for Georgia Power to amend its integrated plan. Johnson, who would need to win an election in 2025 to keep his seat, also conveyed a message to Georgia Power officials that ratepayers cannot continue to be burdened with rate increases.

“That message needs to go back loud and clear,” Johnson said.

Georgia Power also is planning to bring online more renewable energy with the addition of a 500 megawatt solar facility with battery storage by the end of 2026 and plans to build another 500 megawatts of solar battery storage by early 2027.

The company wants to extend purchasing agreements for a natural gas-fired generator in Pace, Florida and to continue buying 750 megawatts of electricity from Mississippi Power, a Southern Company subsidiary. Southern Company is also the owner of Georgia Power.

Georgia Power has agreed not to collect any additional fees from ratepayers until 2026 on excess electricity it purchases.

Southern Environmental Law Center attorney Jennifer Whitfield, who represented Georgia Interfaith Power and Light in the proceedings, said Georgia Power rate payers will be responsible for the bulk of the expected $3 billion investment needed to complete the projects approved on Tuesday. Plant Yates is expected to account for half the total cost.

Analysis from SELC found that Georgia Power could likely  meet realistic demands in growth by relying more on renewable energy sources like solar.

“(Yates) units will have a 46-year life span, potentially locking in Georgia’s reliance on fossil fuels for decades,” Whitfield said. “The agreement also includes buying energy from Georgia Power’s sister company Mississippi Power, a move that will delay the retirement of Plant Daniel, a coal-burning power plant.”

Georgia Recorder is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Georgia Recorder maintains editorial independence.

This story is republished from Georgia Recorder under a Creative Commons license. Read the original story.

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