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Georgia energy regulators this week expressed skepticism toward Georgia Power’s request to buy and generate more energy to meet what the company is calling unprecedented growth in commercial demand.
In hearings before the Georgia Public Service Commission on Tuesday and Wednesday, representatives of the state’s largest utility made their case for a combination of energy purchases and construction of new batteries and gas turbines to meet the needs of an influx of new companies, which they said represented 40 years of growth over a span of just two years.
They also answered questions from commissioners, the commission’s Public Interest Advocacy staff and stakeholders ranging from clean energy groups to Walmart to the Department of Defense. Many of the questions were pointedly skeptical of the request, which comes less than two years after the commission approved the utility’s last energy plan and a year before the next planning process is due to begin.
“Talk with me about why I should have any confidence whatsoever in these projections when the 2022 projections were so off?” Commissioner Tricia Pridemore asked the company’s witnesses.
They replied that the new request is based on real energy needs of new customers, not economic modeling. The forecasts used in 2022, they said, were sound at the time but did not predict the recent, rapid business growth.
“It’s not just a math exercise,” said Jeffrey Grubb, Georgia Power’s director of resource planning. “It’s based on facts. It’s tangible projects.”
Still, commissioners, staff and interveners questioned not just the forecasts but Georgia Power’s choice of energy sources and the utility’s assertion that the changes would drive power rates down, not increase them. That’s after four rate increases have hit Georgia Power customers’ bills in the past year.
During the public comment portion of the hearings, a group of more than a dozen high school and college students urged the commission to reject the use of fossil fuels, which contribute to climate change.
“The generation of energy itself when done using fossil fuels has become an existential threat to our safety due to the undisputed impacts of greenhouse gas emissions on our planet,” said college student Aurora Gray.
The day after the hearings, Georgia Governor Brian Kemp told world leaders at the World Economic Forum in Davos, Switzerland that the state needs more carbon-free energy to meet industry demands.
Business boom
Georgia has enjoyed a much-touted influx of new businesses in the last two years, and those companies need electricity to run. Georgia Power said the need has quickly outpaced the level of economic growth the company planned for or could have predicted in 2022.
“Our updated load forecast projects continued, unprecedented load growth stemming from the economic growth taking place in the state,” said Grubb.
The utility said most of the increased power demand comes from data centers, which use an enormous amount of electricity to keep banks of servers running.
Typically, Georgia Power develops a long-range plan to make and distribute power, known as an Integrated Resource Plan or IRP, every three years; the commission approved the last one in 2022 and another is due in 2025. But the utility said the new slate of customers can’t wait that long. It filed this request, known as an IRP Update, to deliver power the companies will need before currently-scheduled projects or anything approved in 2025 could come online.
It’s an unusual step, the Georgia Power representatives testifying before the commission this week acknowledged. But they stressed the sudden growth in demand is also unusual.
“The recent economic growth has far surpassed the historical trends upon which the company’s forecasts have been traditionally based,” Grubb said.
Under pressure
Generating electricity is expensive, so after each IRP Georgia Power files a rate case to pay for its plans. Through those proceedings, the cost of building new turbines, solar panels or batteries and building and maintaining the power lines to deliver that energy is typically passed on to customers.
Georgia Power bills have increased four times in the last year, with more on the way. In the 2022 rate case, the commission approved annual rate hikes for three years; the first two kicked in at the start of 2023 and 2024, with another scheduled for January 1, 2025. Rates also increased when the first new nuclear unit at Plant Vogtle went into service last year, and will again when the second unit comes online this year. Last year the commission also approved a bill increase to cover high natural gas prices.
This time, Georgia Power officials promised, will be different.
The company officials said the new industrial customers driving the increased need would pay for the costs of this IRP Update, and that the growth in total customer base would actually put “downward pressure” on rates.
Commissioners were doubtful.
“Somebody’s got to pay for it,” said Pridemore, who spent more than 10 minutes Wednesday pressing the Georgia Power officials for more concrete guarantees that rates would not go up. “Will the ratepayer pay a penny more than they pay today?”
“We would expect them to pay less,” Grubb replied. “They will pay less.”
That didn’t convince the whole commission. Commissioner Tim Echols suggested that Georgia Power could agree now not to file a rate case next year as a guarantee that rates won’t go up.
“I’d like to see you all back that up with a commitment,” he told the panel. “That would show me that your leadership believes 100% in your estimates.”
But a rate case isn’t necessarily bad news for customers, as Commissioner Bubba McDonald noted; in theory, the utility could request a rate decrease.
Power and climate
Because the new companies and data centers need power relatively soon – by the winter of 2025-2026 – the Georgia Power officials said they looked for energy sources that can be deployed quickly in places that are already connected to the grid.
The utility is asking for a combination of energy sources to meet the demand, including building a new gas-powered turbine at Plant Yates near Newnan, adding battery storage at existing solar sites and building new solar with batteries, and buying energy from other utilities. One of those utilities is Georgia Power’s sister company, Mississippi Power, which company officials acknowledged has a more carbon-intensive system than Georgia – in other words, that power is more likely to be made by burning fossil fuels that emit carbon dioxide and warm the planet.
Commissioners, interveners and public commenters were again skeptical of this plan.
“I hear you saying that we need new resources, but how can we get more out of what we already have on the system?” Echols asked the company officials.
Georgia Power’s representatives reiterated that existing and currently planned resources just can’t meet the growing demand in time. That includes Georgia Power’s stake in the second new unit in the more than $30 billion nuclear power expansion at Plant Vogtle, due to come online soon.
A group of more than a dozen high school and college students, meanwhile, urged the commission to reject all the fossil fuels in Georgia Power’s request because they contribute to the dire impacts of climate change. They called on the commission to require renewable energy resources instead: more large-scale and rooftop solar, wind energy and programs that incentivize customers to use less power.
“You can help get Georgia Power to take the right actions in the essential timeframe. Actually, you’re the only five people in Georgia who can,” high school senior Evelyn Ford told the commissioners. “Please, fulfill your duty. Act to keep us safe.”
Pridemore asked several of the students if they were paid or receiving course credit for their comments, which they said they were not. Echols asked one student why young people don’t buy more electric vehicles, and suggested that Ford push her school district, which comprises 15 schools in the 4.4-square-mile city of Decatur, to adopt electric buses.
The students weren’t alone in urging the commission and Georgia Power to account for climate change in its plans though.
The Department of Defense, one of the utility’s largest customers because of Georgia’s many military installations, was “frustrated” that the plan didn’t account for DoD’s mandate to use only carbon-free energy by 2030, according to U.S. Army attorney John McNutt.
“Why didn’t you include our requirements in your IRP since we’re one of your existing customers, not some potential future hypothetical customer?” he asked.
Grubb said the utility has a memorandum of understanding to work with the military but also has to consider reliability, cost and timeline for all of its customers. McNutt wasn’t satisfied.
“We’re in the update right now, and you haven’t even talked to us,” he said. “And you can’t even explain why.”
The Georgia Power officials said the company is open to further talks with the military. Two of the new battery storage sites proposed in the IRP Update would be paired with solar at Robins and Moody Air Force Bases. Other military installations in the state also have solar power, but the utility officials noted that adding more solar within the boundaries of military bases can be a lengthy process.
In response to the military’s frustration, Commissioner Echols reiterated his concern that the utility hadn’t considered all its existing options before requesting to build new energy turbines and buy more power.
“It almost feels like we’re in a hurry, that we’re rushing,” said Echols. “When we’re rushing, I wonder if we’re more prone to make a mistake.”
Grubb replied that Georgia Power “had to act pretty quickly” to meet its coming demand.
“But we’ve identified good resources,” he said. “Have we looked at every single one of them? No. Do we continue to look at ‘em? Yes.”
Hearings on the IRP Update will continue next month, with a decision due in April.
