The Georgia Power subsidiary of Southern Co. (NYSE: SO), which relies heavily on coal-fired power, announced Oct. 23 that it has joined with other energy companies across the country in support of a motion to stay the U.S. Environmental Protection Agency’s Clean Power Plan, due to its potential impacts on reliability and affordability of electricity in the state of Georgia.
That final rule was published in the Oct. 23 Federal Register, which is a point where the federal courts have said litigation against it can begin. A number of parties, including a coalition of 24 states and also coal producer Murray Energy, immediately filed lawsuits against the Clean Power Plan for existing power plants, and a companion rule for new power plants.
Georgia Power said it is firmly committed to protecting the investments made in its operations, including generation plants across the state. In an Oct. 23 filing with the U.S. Court of Appeals for the District of Columbia, Georgia Power Senior Vice President and Senior Production Officer John Pemberton noted that, under EPA’s proposed compliance solution, the company would be required to retire 4,800 MW – more than 20% of its total capacity – of fossil fuel-fired generation by 2030. EPA’s compliance solution includes the premature closure of units at Plants Bowen, Hammond, McIntosh and Scherer, as well as Plant Gaston in Alabama.
In addition, based on EPA’s Integrated Planning Model (IPM) analysis, impacts to Georgia Power could include:
- Higher production costs and an insufficient reserve margin resulting in increased customer costs of approximately $830 million in 2016 and 2017.
- More than $515 million in additional costs for needed transmission projects with approximately $70 million in costs in 2016 and 2017 alone.
- $485 million in costs related to impacts to the company’s fuels program in 2016 and 2017.
- Loss of more than $8 million in annual property taxes and approximately $15 million in annual fuel taxes (based on 2014 receipts) beginning in 2016.
- Loss of nearly 800 full-time jobs in 2016 and 2017 alone.
Based on EPA’s results, and because it takes many years to plan and implement changes, Georgia Power said it would have to begin activities immediately in 2016 and 2017, regardless of required state implementation plans yet to be developed. Many of the costs and impacts to reliability could not be reversed once the changes have been started under EPA’s plan.
Georgia Power relies on an established process with the Georgia Public Service Commission (PSC) known as the Integrated Resource Plan (IRP), to make long-term planning decisions on how to best meet the future energy needs of Georgia reliably and affordably. The IRP is filed every three years and includes a 20-year planning horizon. Georgia Power’s next IRP will be filed with the Georgia PSC in 2016.
Georgia Power is the largest subsidiary of Southern Co., one of the nation’s largest generators of electricity.