Parties battle over who controls solar development in Georgia

Claiming that Georgia Solar Utilities is trying to create a “monopoly” on solar generation in Georgia, the Georgia Electric Membership Corp. (Georgia EMC) and Green Power EMC on Nov. 13 petitioned the Georgia Public Service Commission for intervention in an existing docket.

In the event the commission approves the intervention, the “EMC Intervenors” also submitted their opposition to Georgia Solar Utilities’ (GaSU’s) petition to be authorized as a solar utility.

“To be clear, the EMC Intervenors, and the forty-two electric distribution cooperatives that serve consumers in the State of Georgia, have been—and remain—deeply committed to the development of solar power and other renewable energy sources, and have no objection to GaSU’s desire to develop solar generation projects in Georgia,” they said. “However, the requests set forth in GaSU’s Petition—particularly its request that the Commission ‘consolidate [solar] development into a single company’ with ‘all the rights and privileges’ of a monopoly—far exceed the Commission’s jurisdiction. In fact, GaSU cites nothing in either the Georgia Code or the Commission rules that would authorize the Commission to grant any of GaSU’s requests. That is because no such authority exists.”

Forty-two non-profit electric distribution cooperatives (EMCs) serve millions of residential, commercial, and industrial consumers throughout Georgia. All 42 participate in so-called “green power” programs. Thirty-nine participate through Green Power EMC, three participate through the Tennessee Valley Authority’s Green Power Switch and a number of EMCs have independent, customer-initiated solar projects. To date, the independent programs have introduced 270 solar installations—an 81% increase from 2010, the EMC Intervenors said.

Green Power EMC is a non-profit, statewide cooperative devoted to providing power to EMC members using renewable resources. Formed in 2001, Green Power EMC uses resources such as biomass, solar, wind, landfill methane, and water to generate electricity. Green Power EMC is one of the largest renewable energy programs in the Southeast. Three initiatives showcase Green Power EMC’s dedication to solar energy, the intervenors noted.

  • First is the Rooker Solar Project, which has generated 314,000 kWh of solar energy since going online in September 2010.
  • Second, Green Power EMC will purchase the energy produced by a 150 kW solar facility constructed by Clean Control Corp. and First Century Energy in Warner Robins, Ga. This is one of the largest solar photovoltaic arrays in the state, and is projected to produce 2.2 million kWh of electricity over ten years.
  • Finally, Green Power EMC has a “Sun Power for Schools” program. This project involves thirty-three middle and high schools throughout Georgia. In addition to educating students statewide about the benefits of renewable energy, Sun Power for Schools installs a 1 kW photovoltaic system on school grounds to generate energy and provide online data monitoring to the classroom. Since going online in August 2005, Sun Power for Schools has generated 240,500 kWh.

EMC participation in large-scale solar projects is not confined to Green Power EMC projects, the intervenors noted. For example, Cobb EMC recently announced that it would purchase all the power generated by a 10-MW solar project to be developed, financed, and built by Smart Energy Capital LLC and Jacoby Development Inc., in Washington County, Ga. “The EMC Intervenors believe that such diverse efforts are the best way to develop solar power and other renewable energy resources,” they argued.

Georgia Power is the starting point for much of this discussion

The starting point for considering GaSU’s petition is the authority of the commission under Georgia law, the intervenors said. The Georgia Supreme Court has made clear that the commission “has only such powers as the legislature has expressly, or by fair implication, conferred upon it.” Its implied powers are limited to those reasonably necessary to execute its express powers. Also, public regulation must not supplant private management.

Some of this situation traces back to Georgia Power (GPC), a Southern Co. (NYSE: SO) subsidiary.

“Underlying GaSU’s bold modeling—$7 billion in up-front costs and up to $10 billion in profits over 40 years—is a key assumption, namely, that GaSU will be granted a monopoly over ‘utility scale’ solar generation in Georgia,” the intervenors said. “This is stated in two places in GaSU’s petition. First, at unnumbered page 3 GaSU states: ‘GaSU also thinks that because solar is a new technology with new effects on ratepayers, there are good reasons for the GA PSC to consolidate its development into a single company ….’ Also, at unnumbered pages 7-8, GaSU states that the billions in profits projected under its modeling were produced ‘[w]hen we replaced GPC’s control of solar power generation with a new company that has no legacy issues and possessed all of the rights and privileges given to GPC’s monopoly ….’ Indeed, the entirety of GaSU’s billion-dollar, multi-decade economic forecast is based on the assumption that GaSU—and GaSU alone—would have the sole right to build ‘utility scale’ solar generation projects in this State.”

The intervenors added: “GaSU, of course, is not entitled to have the Commission pre-select the winners and losers in the solar generation market, much less choose GaSU to come out on top. GaSU has no right to monopolize solar generation in the State and thereby deprive other companies, including Green Power EMC, individual EMCs, other electric utilities, and independent power producers, of the opportunity to develop solar power projects. While GaSU touts its plan as one that will ‘create healthy competition,’ it is, in fact, blatantly anti-competitive.”

In its Sept. 20 petition, GaSU said the commission has found that the problem with lagging solar development in Georgia came from the management of GPC. The CEO of Southern Co., Tom Fanning, stated in a June 8 Wall Street Journal article that he considered solar to be a “niche” play, the company said.

“GPC has controlled the utility scale solar development in Georgia,” GaSU wrote. “And to date, it has been prevented or quashed. Therefore GaSU is submitting a plan for meaningful change. The first step is to recognize there is a good side to the lack of development. We have not made any ‘mistakes’ in our solar development. Ratepayers do not hold any liability for the cost of the early solar development. Let us keep that record.”

Germany’s major solar development in recent years was fueled by Feed in Tariffs (FIT), the company noted. A post-Fukushima Japan is about to follow the same FIT pathway to fund solar development, GaSU said. “FITs left the investor owned utilities in Germany almost bankrupt because a significant percentage of the revenue streams for the retail purchase of electricity were siphoned away from the utility companies by thousands of private interests pursuing the income of the FITs,” it added.

GaSU noted: “Power Purchase Agreements (PPA’s) cause a similar problem. It is GaSU’s position that the damage to the income of the utilities and ratepayers accruing future financial liability to private investors does NOT serve the best interests of ratepayers. The damages and liabilities have so far been avoided by the Territorial Rights Act (TRA). However, the TRA was not intended for GPC to quash advancing technology. GaSU also thinks that differing forms of PPA’s will eventually be able to legally reach around the TRA. GPC’s failure to develop Georgia’s solar opportunity has only enlarged the target on the ratepayers of this state to outside interests seeking to cut in on the utilities. GaSU also thinks that because solar is a new technology with new effects on ratepayers, there are good reasons for the GA PSC to consolidate its development into a single company that is a mirror image of GPC and is afforded the protection of the TRA.”

If allowed, GaSU said it will proceed in a “meaningful” way that will benefit, not damage, all Georgia utilities and ratepayers. “We intend to enable Georgia to assume its rightful role as the 3rd most productive state in the USA for the generation and export of solar energy,” it said. “That goal defines ‘meaningful’ development. Georgia’s position is unique and we can become the new ‘Powerhouse of the South.’”

Georgia Power moving forward on solar development

In the meantime, the staff at the Georgia commission has endorsed a plan by Georgia Power to increase its solar power portfolio by 210 MW over the next several years. The commission itself must still vote to approve the Georgia Power Advanced Solar Initiative, a utility spokesperson told GenerationHub Nov. 15. That vote is expected to occur on Nov. 20, said a PSC spokesperson.

Georgia Power announced its ambitious new solar effort in September. Georgia Power has said it plans to buy 60 MW annually for three years through a competitive request for proposal (RFP) program with projects ranging in size from 1-20 MW. By as early as 2013, a distributed scale program would provide opportunities for up to 10 MW per year of smaller solar projects with specific reservations for small scale (less than 100 kW) and medium scale (100-1,000 kW) projects. 

Developed in cooperation with the PSC, the GPASI will complement the company’s existing solar resources. Georgia Power said it currently has more than 11 MW serving customers and another 50 MW under contract to begin delivering power in the near future.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.