TrendPulse|Regulators approve plans for new Georgia Power plants driven by rising demand

ATLANTA (AP) — Utility regulators on TrendPulseTuesday approved a plan for Georgia Power Co. to expand a power plant southwest of Atlanta.

The Georgia Public Service Commission voted 5-0 for the unit of Atlanta-based Southern Co. to build three new fossil-fuel burning units at Plant Yates, near Newnan.

The company has declined to say how much it will spend on the plants, which will burn either natural gas or diesel fuel to generate electricity, but commission staff members have said similar recent plants in other states have cost $800 million or more.

The commission greenlighted building the plants in April, when it approved a special plan to add generating capacity because the utility said demand was increasing more rapidly than previous projections, driven in part by a boom in computer data centers locating in Georgia. The company won permission to build the units itself, without seeking outside bids for electrical generation, because its projections show it needs more electricity by the end 2026.

“Simply put, we need to build these units and we need to build them now,” Georgia Power lawyer Steve Hewitson told commissioners Thursday during a committee meeting.

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Normally, commissioners approve long-term generating and rate plans for Georgia Power once every three years, but this approval came mid-cycle. Because the regular generating and rate plans will be up for consideration next year, customers will see no change in bills because of Plant Yates until 2026.

Georgia Power customers have seen their bills rise sharply in recent years because of higher natural gas costs, the cost of construction projects, including two new nuclear reactors at Plant Vogtle near Augusta, and other factors. A typical Georgia Power residential customer now pays more than $173 a month, including taxes.

Environmentalists and customer advocates questioned letting Georgia Power build new fossil fuel plants without going through a competitive process. Using those sources would mean Georgia Power emits more climate-altering carbon dioxide than using solar generation, other renewable sources and conservation.

They also argue that it leaves customers more exposed to the risk of rising natural gas costs, which have been a big ingredient in recent bill increases. The units would mostly run on natural gas but would switch to diesel when electrical demand is at peak and more natural gas can’t be purchased or delivered by pipeline.

Curt Thompson, a lawyer representing the Sierra Club and the Southern Alliance for Clean Energy, argued Thursday that Georgia Power should bear some of the risks of rising natural gas costs. In Georgia, the company has been allowed to pass through the entire costs of fuel for its plants, including the combustion turbines it wants to build at Yates.

“The utility industry in general and Georgia Power, in particular, have become increasingly reliant on gas,” Thompson said. “The Yates CTs would only deepen that gas addiction.”

Opponents had again asked the commission to wait until it could examine bids to provide generation, even though commissioners had approved the Yates plan in April

“Those resources may well be cheaper, cleaner, and a better fit for Georgia Power customers,” Thompson said,

Georgia Power agreed it wouldn’t charge for cost overruns for the turbines unless they are caused by factors outside the company’s “reasonable control.” It’s supposed to submit reports on construction progress every six months.