Mere moments before the final hearing in Georgia Power’s “October surprise” IRP Update, yet another surprise: the Public Interest Advocacy (PIA) Staff of the Georgia Public Service Commission (PSC) filed a proposed “Stipulation” — a settlement purported to “resolve all the issues in this Docket.”  This was a dubious maneuver both in terms of due process as well as the content of the agreement itself.

Initial reactions that I heard about the “Stip” ranged from “dumpster fire” to “fossil fuel bonanza” (which I really like, BTW). My own initial reaction was that the Stipulation “reeks” — it reeks of methane — because that’s the primary fuel for this resource portfolio. Worse yet, there’s even some coal and some oil envisioned in the plan. The Stipulation approves all that and, adding insult to injury, the Stipulation even removes a token amount of new solar (200 MW) that Georgia Power had initially proposed.

SACE and other intervening parties had arrived to the hearing room that day (March 27) prepared to cross examine Georgia Power witnesses on their Rebuttal testimony. With this 11th-hour pivot, the PSC Chairman agreed to supply printed copies of said agreement and afforded parties an insufficient 20 minutes to digest it before resuming the hearing.

Of course, since only Georgia Power witnesses were on the stand, there was no opportunity to cross-examine PIA Staff on why they felt compelled to settle the case. The stip included approval of items that PIA Staff’s own witnesses testified against just a few weeks ago. That is perhaps the most perplexing thing.

PIA Staff witnesses had made a strong case in the prior hearing that capacity from the three proposed combustion turbines (CTs) at Plant Yates is not necessary until 2029. And Georgia Power has already drafted a Request for Proposal (RFP) to invite competitive bids of capacity resources for that time period. That RFP is scheduled to go out next month (May 10). So PIA Staff’s own  recommendation was “that the Commission deny the Company’s request for certification of the Yates Combustion Turbine (“CT”) Units 8, 9, and 10.” And that instead those units “should be bid into the 2029 – 2031 capacity RFP to determine whether this capacity is least-cost and the most reliable compared to other options.”

That recommendation made complete sense. However, the PIA Staff subsequently negotiated the stip with Georgia Power that approves the Yates CTs. Again, procedurally, the parties did not have an opportunity to cross-examine PIA Staff on their about-face. And since this cohort of the Public Service Commission staff is supposed to represent the “public interest,” many of us are struggling to understand why it would be in the public interest to let Georgia Power bypass the ordinary competitive procurement processes and commission these 45-year assets. Those units will go into ratebase and Georgia Power will earn Return on Equity on them every month despite the fact that Georgia Power witnesses acknowledged they will only run less than 1/10th of the time.

We’re also left to wonder why it’s in the public interest to even further increase Georgia Power customers’ vulnerability to fuel price volatility. The proposed CTs at Plant Yates would be dual-fuel to not only burn fossil gas (methane) but could also burn fuel oil. This expanded resource portfolio (if approved) would take Georgia Power’s share of generation from fossil-gas to a full 50%. Georgia Power is already over-reliant on fossil gas at 48%.

And lest we forget, it was the spike in fossil gas prices in 2022 that caused the biggest increase in customer bills in recent years.  A typical residential customer using 1,000 kWh per month is now paying an average of $15.90 more per month ($190 more per year) to cover the fuel cost. Fuel oil costs tend to be higher than fossil gas, and those costs are also passed onto customers. Since the availability of fossil gas can be unreliable and lead to blackouts, having fuel oil as a backup can improve reliability but further exacerbate costs. 

The fuel cost increase referenced above is in addition to the multiple rate increases already experienced as well as those already locked and loaded in the chamber. For example, the long-delayed and preposterously over-budget Plant Vogtle Unit 4 reached full output last week. So brace yourself; that puts us within just a couple months of customers receiving another shock with typical residential bills increasing again by another 6%.

SACE filed our final brief in the docket April 4. It elaborates more on other aspects of the Stipulation and puts forth a single recommendation:

• SACE recommends that the Commission defer decision on the Plant Yates combustion turbines (8-10) until the full IRP next year (2025 IRP).  The Company can bid these units into the All-Source Capacity Request for Proposal (RFP) that is presently drafted and scheduled to be issued next month (May 10, 2024).  The competitiveness of these units can be duly considered against other bids to assure least-cost resources are selected for the 2025 IRP.

A clean energy advocacy organization can’t sit idly by and let Georgia pursue more dirty fossil-fueled energy — particularly if it’s not absolutely necessary. If PIA Staff isn’t going to honor its own witness testimony, then we will.

On a related note, a bill (SB 457) passed the Georgia Senate at the end of February that would have reinstated a Consumer’s Utility Counsel — an office that most other states have but was disbanded in Georgia in 2008.  This Counsel would have the legal authority and duty to represent consumer interests. After crossing over to the Georgia House of Representatives, that bill did not get scheduled for a committee vote and will need to be reintroduced next session. The concessions made by PIA Staff in this IRP settlement illuminate why having the Consumer’s Utility Counsel is critical.

The post Georgia Power “October surprise” IRP Update appeared first on SACE | Southern Alliance for Clean Energy.

Georgia Power “October surprise” IRP Update