USD/BTC = $88,300
Block 928,883
TL:DR

Georgia Power announced a surprise deal that would allow the utility to carry out a massive expansion just before hearings on the plan were due to begin Wednesday.

Georgia Power has asked the Georgia Public Service Commission to certify — essentially, give the green light to build or buy — a slate of energy resources totaling nearly five times the output of the recently-built nuclear reactors at Plant Vogtle.

The huge growth, which includes new battery projects and expansions at existing power plants, is intended to meet rising demand Georgia Power officials have said comes mostly from new data centers. The price tag for the new construction is at least $15 billion, according to Georgia Power’s public filings.

The company’s expansion request had been working through rounds of hearings and filings when the new proposed agreement with PSC staff was announced.

Officials with the utility said the deal, if approved, would allow it to meet new energy demand while keeping costs low for customers. But critics pushed back, saying the deal was a last-minute surprise that would undercut the transparency of the approval process.

“We know every dollar counts. This plan means more money stays in your pocket while we power Georgia’s future,” Georgia Power Chairman, President and CEO Kim Greene, chairman said in a written statement. “Large energy users are paying more so families and small businesses can pay less, and that’s a great result for Georgians.”

The agreement announced Wednesday between the utility and the commission’s public interest advocacy staff calls for approval of the expansion plans with some caveats. Under the deal, the commission wouldn’t consider increasing the budget for each construction project until further down the road, when it’s more clear whether there will be data centers in place to use the energy and cover the costs.

The deal also promises “downward pressure” on power rates to the tune of $8.50 per month for the typical residential customer the next time the commission considers rates. That doesn’t guarantee rates would go down; the amount would offset any proposed increase.

This type of deal, known as a stipulated agreement, is a common outcome when Georgia Power brings a complex request before the Public Service Commission. It’s the typical means for the utility, commission staff and other interested parties to reach a compromise the commissioners can vote on.

But some involved in the proceedings were critical of both the substance of the deal and its announcement just over an hour before hearings resumed.

“Bill relief is desperately needed, but it is impossible to look past the reality that this agreement greenlights Georgia Power to massively overbuild energy resources with devastating environmental and financial risks,” Jennifer Whitfield, an attorney with the Southern Environmental Law Center who represents two environmental groups in the case, said in a written statement. “This agreement guarantees dirtier air, water and health threats for communities living where these new methane plants would be built.”

During the public comment period Wednesday morning, several people criticized the timing of the agreement.

“It was filed before interveners had a chance to make their case, before commissioners had a chance to hear from the public,” said commenter Lisa Coronado. “PSC staff shouldn’t have even begun discussing a settlement until after today’s hearing.”

The proposed deal is also a marked change from the recommendations the commission’s public interest advocacy staff originally planned to make this week. Witnesses are required to file their written testimony in advance, and according to that testimony staff planned to recommend a conditional approach, where only enough energy for current customers would be approved. Under that suggestion, when and if more data centers signed contracts with Georgia Power, the company could add resources to serve them. This aimed to address a central point of contention: The expansion plan relies on predictions that proposed data centers will really be built and buy lots of energy from Georgia Power. If those potential customers don’t pan out, current customers could be left to foot the bill for expensive projects that aren’t actually needed.

The stipulated agreement does not include that conditional approach, which the Southern Environmental Law Center called a “stunning reversal” in a statement. But the commission staffers who negotiated the deal said it still protects customers.

Robert Trokey, the director of the commission’s electric unit, said it should be clear within six to nine months whether current potential data center customers are actually entering into contracts with Georgia Power. If those contracts come in below the utility’s predictions, he said, the utility and commission can take mitigating steps like not renewing power purchase agreements or closing units at power plants.

“There’s action Georgia Power can take on its own accord, and the commission has the authority to call Georgia Power in to provide a new plan if it looks like there’s going to be investments that aren’t needed,” Trokey said.

After years without PSC elections due to a voting rights lawsuit, Georgia voters last month ousted two of the five commissioners. Amid rising energy costs nationwide and following six increases to Georgia Power customers’ bills in the last three years, that election drew more attention and money than usual. Voters favored Democratic challengers to the Republican incumbents with more than 60% of the vote, changing the makeup of the commission that’s been composed entirely of Republicans since 2006.

In light of the election results, advocates had petitioned to delay the vote on the expansion plan until the new commissioners take office next month. Commission chair Jason Shaw denied that request, noting that the schedule for this issue has been set since August. But in a gathering outside the Commission’s offices Wednesday morning and during the public comment period, numerous activists reiterated the call to delay the decision.

One of the activists, Emory student Ava Trachtenberg, said some of the proposed new turbines would keep burning natural gas for decades into the future even as she worries about climate change now.

“In 2075 I will be 70 years old. I hope to have children, even grandchildren, by then, and I’m scared for the future I will have to pass on to them,” she said.

The students posted a list of concerns and grievances outside the commission’s doors. Protestors were also removed from the hearing room by police as the hearing began.

The commissioners are set to vote on the proposed deal next week.

My Thoughts 💭My Thoughts 💭

Building for capacity that might not come is always risky business. 170k BTC to potentially lower power bills by 9k sats doesn’t feel like a great trade off. The climate change concerns I’m not too worried about with them going with natural gas but I think the team needs more planning and demand forecasting so the citizens aren’t left holding the bag.