Firm News

Georgia Utility Update – September 2016


PSC Approves An Additional 1,600 Megawatts (“MW”) of Renewable Energy by 2021

The Georgia Public Service Commission’s recent Integrated Resource Plan (“IRP”) decision provides for the development of an additional 1,600 MW of renewable energy in Georgia.  Requests for proposals will be issued in 2017 for 525 MW and 2019 for 525 MW.  The 1,600 MW or renewable generation will be composed of 1,050 MW of utility scale generation, 150 MW of distributed generation, 200 MW of self-build capacity for Georgia Power and 200 MW for a commercial and industrial program.  Costs to implement and administer the renewable energy program will be recovered through Georgia Power’s fuel charge.

No more than 75MW of  Georgia Power’s 200 MW self-build development may be with non-military customer projects.  All of the projects must be at or below the Company’s avoided cost.  Additionally, the Company shall consider the development of a 200 MW renewable Commercial and Industrial Program that will be reviewed by the Commission.

The IRP also provided for the retirement of several old coal plants – Plant Mitchell Units 3, 4A and 4B, Plant Kraft Unit 1 CT and Intercession City CT – to be completed by 2018.  The Company’s reserve margin was raised from 15% to 16.25%.  Additionally, the coal ash pond solar demonstration project and High Wind Study were   approved. 

As part of  the IRP Georgia Power requested $175 million for licensing and study costs associated with new nuclear units to be located on the Chattahoochee River in Stewart County, the Commission approved $99 million until the next IRP in 2019.  PSC Staff analysis indicated that the initial request for $175 million did not include financing costs that would increase the actual costs for licensing to over $330 million.  Georgia Power claims it may need the additional nuclear generation capacity by the 2030s.


Vogtle Units 3 and 4 Prudency Review Report to the Commission Due October 19

On January 21, 2016, Georgia Power Company filed a request with the Commission to recover $350 million in litigation settlement costs it paid to its contractor for Vogtle Units 3 and 4.  At the January 28th Energy Committee meeting Commissioner Wise made a motion to review all of the Vogtle Project costs incurred-to-date, including the litigation settlement costs.  On February 2, 2016, the Commission approved the Vogtle prudency review for all costs of the Project. 

Georgia Power is seeking certification that all of its costs up to December 31, 2015, or $3,509 billion are prudent and reasonable.  Costs certified as “prudent and reasonable” are not subject to any future review or disallowance.  Certified costs are included in the Company’s rate base for recovery from ratepayers. 

This is the first prudency by the Public Service Commission since the Vogtle Units 1 and 2 prudency reviews conducted in 1987 and 1989.  While the Vogtle 1 and 2 prudency reviews had several weeks of public hearings, testimony from the Company’s senior officers and consultants and cross-examination of those witnesses, the prudency review for Vogtle 3 and 4 provides for no extended public hearings, no testimony from any witnesses and no cross-examination.

The Public Service Commission Staff is conducting a limited review of the Vogtle 3 and 4 expenses and is scheduled to report to the Commission its findings or possible settlement proposal on October 19, 2016.  Certification of all the Vogtle 3 and 4 costs as prudent and reasonable face several challenges, such as, the Project currently being 39 months behind schedule, persistent problems with the module and sub-module fabrication from the beginning of the Project, no complete Integrated Project Schedule until 2016, the inability to test equipment and systems until they are complete and the possible inclusion of costs that should be allocated to Vogtle Units 1 and 2.


Atlanta Gas Light Company Submits Its 2017 Facilities Expansion Plan for $24 Million

Atlanta Gas Light Company (“AGLC”) recently submitted its 2017 facilities expansion plan that will target Appling, Macon and Schley Counties.  Estimated total costs for the three projects are $9.5 million for Appling County, $2.5 million for Macon County and $12.4 million for Schley County.  Of particular interest is the Schley County project which has no projected customers and no projected revenue through 2021.  The AGLC filing in Docket 40714 indicates that the project will install approximately 26,000 feet of six inch steel pipe along Highway 271 to US Highway 19 to provide natural gas service to customers in Ellaville.