The Alabama Public Service Commission unanimously approved on Sept. 1 a proposal by Alabama Power to secure up to 500 MW of renewable generation over the next six years.
Alabama Power noted in a Sept. 1 statement that the plan provides options for the company to work with customers who’ve made renewable generation a priority, while protecting other customers from bearing additional costs.
“This allows Alabama Power to offer renewables where they make sense for our customers,” said Nick Sellers, the company’s vice president of Regulatory and Corporate Affairs. “We are pleased that the Public Service Commission has reviewed and approved this filing. We look forward to working with those customers who have interest in more renewable energy.”
The Southern Co. (NYSE: SO) subsidiary filed the proposal with the commission in June. A number of organizations, including the Southern Environmental Law Center, the Southern Alliance for Clean Energy and the Alabama Environmental Council, participated in a hearing on the plan. The state Attorney General’s office also took part in the hearing.
Under the proposal, the company can either build its own renewable projects or secure purchase-power agreements for renewable energy. Each project can be no larger than 80 MW, and the first project must be under construction within a year.
The commission approved the plan with some modifications. One requires the company to issue a request for renewable proposals every two years, beginning in 2016. Also added was a requirement that the commission vote on each individual project. All the renewable projects will be reviewed by the PSC and the Attorney General’s office, and must provide positive economic benefits to all Alabama Power customers, such as putting downward pressure on rates.
Alabama Power already has 1,600 MW of hydro resources across Alabama and 404 MW of purchased wind generation from projects in Kansas and Oklahoma. Alabama Power has the ability to re-sell the energy from its purchased wind generation and the associated renewable energy credits (RECs) – together or separately – to third parties to help keep rates low for customers. The company will have the same flexibility with qualifying projects under the just-approved renewables proposal.
Noel Cain, regulatory policy manager for Alabama Power, said during the PSC public hearing that renewables could help further diversify the company’s energy sources, giving the company greater flexibility in choosing the most cost-effective option for customers. Solar energy, for example, could potentially help offset higher-cost energy sources during the hottest part of the day. She also said that some renewables could potentially assist the company in meeting future mandates for reducing carbon emissions as proposed under the recently-finalized federal Clean Power Plan.