The Georgia Public Service Commission began hearings this week on Georgia Power’s 2019 Integrated Resource Plan (IRP), which is a long-term plan that many utilities across the country must file with their regulators to demonstrate how they plan to meet future energy demand. Consumers Energy and Northern Indiana Public Service Company have recently used their IRP processes to propose retiring coal plants and replacing the capacity with renewable energy and storage technologies. Georgia Power, however, is asking its regulators at the Georgia Public Service Commission (PSC) to continue with a plan of limiting the development of renewable energy while it sets the stage to build more fossil fuel power plants that will lock in carbon emissions for decades to come.
Limiting Renewable Energy Growth and Ignoring Low-Carbon Goals
Georgia Power proposed building and adding 1,000 megawatts (MW) of solar power to the grid over the next 20 years. Rather than using cost data or corporate purchasing interest to determine the amount of renewable energy it would procure, Georgia Power seems to have picked a random number. PSC staff asked Georgia Power to “provide all analyses and workpapers behind the selection of a 950 MW target for the Utility Scale Renewable Energy Procurement.” Georgia Power responded, “There are no analyses specific to the selection of the 950 MW target for the proposed Utility Scale RFP.”
Georgia Power answered identically to the PSC staff’s question about its 50 MW target for distributed renewable energy.
Georgia Power further admitted that it had received requests for up to 1400 MW of renewable energy from large customers in the last two years alone. The company’s utility-scale renewable energy target of 950 MW could only serve 68% of this demand, leaving no further renewable energy capacity available for the remainder of the 20-year planning horizon.
The utility also ignored its own low-carbon goals when deciding how much renewable energy to develop. In April 2018, Georgia Power’s parent company, Southern Company, announced a commitment to reducing greenhouse gasses 50% by 2030 and achieving “low- to no” greenhouse gas emissions by 2050. While details have been murky, Southern Company went so far as to trumpet its “robust process to get us there” and listed integrated resource planning as a tool the company would use to outline steps on how it plans to reduce emissions.
When asked by the Georgia PSC staff how Southern Company’s goals affected Georgia Power’s IRP, the utility responded that the goals “did not influence the target amount of renewables proposed.”
Utilities regularly overstate the costs for renewable energy in IRPs in order to prevent their models from selecting an otherwise attractive resource. In its 2019 draft IRP, the Tennessee Valley Authority (TVA) used cost data for wind that was 177% above industry cost data from the National Renewable Energy Laboratory and Lazard. TVA also used solar and battery storage costs above the industry reports. Michigan’s DTE Energy believes the price of utility-scale solar will not fall below $1.00 per watt until 2026, despite costs for utility-scale solar going down by nearly half from 2013 to 2018.
Georgia Power redacted all of its cost data, claiming it is “confidential and trade secret information,” even though utilities across the country, including its neighbor TVA, release the data to the public. Georgia Power even redacts the acknowledgements in the cost section of its IRP.
Inflated Load Projections
Utilities across the country are selling less electricity due in large part to the success of energy efficiency. U.S. electricity sales have not increased since the Great Recession of 2009, even though the economy has improved. Feeling the pinch, many utilities have inflated their sales projections to justify the construction of new power plants that are unlikely ever to be needed.
For example, Dominion Energy’s IRP in Virginia was rejected by regulators in late 2018 because the Commission had “considerable doubt regarding the accuracy and reasonableness of the Company’s load forecast for use to predict future energy and peak load requirements.”
Georgia Power, like Dominion, ignores the previous ten years of history when making its own load projections and inflates demand. From 2007 to 2017, Georgia Power’s total weather-normalized electricity sales fell at an average annual rate of -0.2%. Despite that, the utility claims that electric load will now grow by an average of 0.7% annually through 2029 due to population growth, even though national data and Georgia Power’s own experiences do not back up the assertion.
Reserve Margin Study Locks in Fossil Fuels
Since the 2016 IRP, Georgia Power has used a PSC-approved reserve margin of 16.25% but has proposed switching to a seasonal reserve margin of 16.25% for the summer and 26% for the winter. The utility claims it must take this action because of “winter reliability concerns.”
However, the North American Electric Reliability Corporation (NERC) and the SERC Reliability Corporation (SERC) – the entities responsible for the reliability and security of the electric grid across the country – state that Southern Company utilities need a total reserve margin of only 15% to maintain reliable services. NERC further states that the reserve margins in SERC-SE, which primarily consists of Southern Company territory in Georgia, Alabama and Mississippi, will trend above 30% for the next decade due to flat demand, resulting in “no expected loss of load.”
Georgia Power admitted when questioned by PSC staff, that it “is not expected to establish its annual peak demand during the winter season before 2038.” Because winter peaks usually occur in early morning hours, a doubling of the winter reserve margin would keep polluting coal-fired power plants online longer or could lead to new natural gas construction.
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