Georgia Power said Jan. 10 that it plans to ask the Georgia Public Service Commission (PSC) to let it decertify Unit 3 at Plant Mitchell in Albany, Ga.
The company is also cancelling its longstanding proposal to convert the coal-fired unit to biomass. That is after extensive review and analysis found that the conversion would not be cost effective for customers. If the request to decertify the 155-MW unit is approved, it will be retired by April 16, 2015, which is the compliance deadline under the U.S. Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS).
“We are continuously evaluating our generation mix to determine what sources provide the best long-term value for our customers,” said John Pemberton, senior vice president and senior production officer for Georgia Power. “Fuel diversity is key in providing clean, safe, reliable and affordable energy and we will continue to leverage natural gas, coal, nuclear and renewables, as well as energy efficiency programs, as part of our robust portfolio.”
Since proposing the conversion to biomass in 2008, Georgia Power said it has worked to assess the project in light of new EPA regulations, as well as changing market and economic conditions. In addition to increased capital costs and costs related to environmental compliance, multiple other factors, such as the recent economic downturn and lower natural gas prices, have significantly reduced the project’s value and benefits for customers. The company also considered switching the unit to Powder River Basin (PRB) coal or natural gas, neither of which proved viable.
Georgia Power is in the midst of a significant transition in its generation fleet. As part of its 2013 Integrated Resource Plan (IRP), the company received approval from the PSC in 2013 to decertify and retire more than 2,000 MW of coal- and oil-fired generation at facilities across the state.
By 2017, the Southern Co. (NYSE: SO) subsidiary is expected to have more than 2,300 MW of generation from renewable sources in operation or under contract including hydro, biomass, landfill gas, solar and wind generation. The company recently added 250 MW of wind generation to its portfolio and will soon have nearly 800 MW of solar capacity under contract.