Category Archives: CWIP

What Georgia Power is afraid of: GaSU and Dr. Smith; and you

So what is Georgia Power afraid of that made their CEO Paul Bowers double down on old-style baseload? Competition, that’s what! What could be more scary in the power-monopoly state of the 1973 Territorial Electric Service Act?

GaSU sun On one side, Georgia Power faces GaSU and its 80 or 90 MW solar plant proposal. Walter C. Jones wrote for OnlineAthens 24 September 2012, Proposed solar company could stir up Georgia’s utility structure,

A proposal from a start-up business promises to lower electricity rates by rebating profits to customers if given a chance to compete as Georgia Power Co.’s “mirror image.”

GaSU fb profile image To proceed with its long-range plan of developing 2 gigawatts of solar power, the start-up, Georgia Solar Utilities Inc., wants to start by building an 80-megawatt “solar farm” near Milledgeville as soon as it gets a green light from the Georgia Public Service Commission. GaSU filed its request last week, and as of Monday, it’s still too fresh for public evaluation.

So radical is the proposal that spokespersons for Georgia Power and the Georgia Solar Energy Association said they still were evaluating it and could not comment.

Groups that normally advocate for customers also are staying quiet.

GaSU executives recognize such a big change won’t come easily.

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Georgia Power’s Bowers pushes solar misinformation out the next fifty years

Paul Bowers, CEO of Georgia Power, doubled down on baseload nuclear, coal, and natural gas for the next fifty years. What’s he scared of?

Nick Coltrain wrote for OnlineAthens yesterday, Renewable push not in the cards for Ga. Power,

Georgia Power CEO Paul Bowers in Georgia Trend, November 2011 “Renewable (energy sources are) going to have a sliver,” Bowers said of fuels to create electricity. “Is it going to be 2 or 4 percent? That’s yet to be determined. Economics will drive that. But you always remember (that renewable energy is) an intermittent resource. It’s not one you can depend on 100 percent of the time.”

One time you can depend on it is hot summer days when everybody is air conditioning, which is why Roger Duncan of Austin Energy in 2003 Austin Energy flipped in one year from spouting such nonsense to deploying the most aggressive solar rooftop rebate program in the country. Austin Energy did the math and found those rebates would cost about the same as a coal plant and would generate as much energy. And when it is needed most, unlike the fossilized baseload grid, which left millions without power in the U.S. in June and hundreds of millions without power in India in July.

Bowers knows better than the nonsense he just spouted; as recently as November 2011 he told Georgia Trend,

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Southern Company’s three-legged nuclear regulatory-capture stool

The failed EDF nuke project at Calvert Cliffs in Maryland makes it clearer why Southern Company (SO) was the first company to get a nuclear permit in 30 years: it was the only one big enough and monopolistic enough to pull it off. Even then it’s such a bet-the-farm risk that even “great, big company” SO only dared to deploy its “great big huge scale“ equipment with the regulatory capture triple-whammy of a stealth tax on Georgia Power bills, PSC approval of cost overruns, and an $8.33 billion federal loan guarantee:

  1. a legislated stealth tax in the form of a rate hike on Georgia Power customers for power they won’t get for years if ever. If you’re a Georgia Power customer, look on your bill for Nuclear Construct Cost Recovery Rider. You’ll find it adds about 5% on top of your Current Service Subtotal. Georgia is one of only a handful of states where such a Construction Work in Progress (CWIP) charge is legal thanks to our regulatory-captured legislature. Doubling down on bad energy bets, Southern Company is also trying to use CWIP to build a coal plant in Mississippi.
  2. A captive Public Service Commission that rubber-stamps costs for Plant Vogtle. In case there was any doubt as to the PSC’s role in legitimizing those new nukes, the very next day Fitch reaffirmed Southern Company’s bond ratings.

    Southern Company’s regulated utility subsidiaries derive predictable cash flows from low-risk utility businesses, enjoy relatively favorable regulatory framework in their service territories, and exhibit limited commodity price risks due to the ability to recover fuel and purchased power through separate cost trackers.

    Translation: Georgia Power customers subsidize SO’s bonds and SO shareholders’ stock dividends. The PSC also approved cost overruns being passed on to Georgia Power customers, and those nukes are already over $400 or $900 million, depending on who you ask. What do you expect when 4 out of 5 Public Service Commissioners apparently took 70% of their campaign contributions from utilities they regulate or their employees or their law firms, and the fifth commissioner took about 20% from such sources? Hm, there’s an election going on right now!
  3. An $8.33 billion federal loan guarantee. Even that’s not good enough for SO and Georgia Power: SO is asking for less down payment.

And what if even one of that three-legged regulatory capture stool’s legs went away? Continue reading →

Southern Company: let’s do the renewable energy study for Georgia

Mark Z. Jacobson's study shows offshore wind is plentiful from Virginia to Maine Let's do the study for Georgia! Southern Company brags about its private R&D:

Research & Development (since the 1960s)

  • Awarded more than $1.3 billion to conduct more than $3.8 billion of research and development.
  • Qualified for $412 million of investment tax credits for a 21st century coal plant being built in Mississippi.

OK, SO, let's see you do the study to show what we can really do with conservation, efficiency, wind, sun, and less natural gas than we have now. Sure, in the Georgia Bight we do have to contend with hurricanes. But a "great, big company" like SO should be able to focus its vaunted private R&D on that problem and solve it.

Maybe SO doesn't want to do that because the result might show there is no need for any coal plants, nor new natural gas plants, nor any nuclear plants, which would mean Georgia Power would have to give up its nuclear-funding rate-hike stealth tax and SO would have to give up its $8.3 billion loan guarantee. Hey, we might even need to change the 1973 Georgia Electric Territorial Act, and that might damage Georgia Power's guaranteed profit! Nevermind that Georgia Power and SO might make more profit if they got out in front on solar and wind power and a smart grid.

If SO won't do it, how about we elect some Public Service Commissioners and legislators who will? For jobs, energy independence, and profit, oh, and clean air and plenty of water!

-jsq

All U.S. east coast electricity could come from offshore wind 3 seasons out of 4

Why build nukes when wind can provide 3/4 of our power? While Southern Company claims to be “a company that is engaged in offering solutions, not just rhetoric”, yet does nothing about wind off the Georgia coast, researchers in far California have demonstrated we can get 3/4 of all needed east coast electricity from offshore wind.

Bjorn Carey wrote for Stanford Report 14 September 2012, Offshore wind energy could power entire U.S. East Coast, Stanford scientists say

A new analysis by Stanford researchers reveals that there is enough offshore wind along the U.S. East Coast to meet the electricity demands of at least one-third of the country.

The scientists paid special attention to the Maine-to-Virginia corridor; the historical lack of strong hurricanes in the region makes it a favorable site for offshore wind turbines. They found that turbines placed there could satisfy the peak-time power needs of these states for three seasons of the year (summer is the exception).

“We knew there was a lot of wind out there, but this is the first actual quantification of the total resource and the time of day that the resource peaks,” said Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford who directed the research. “This provides practical information to wind farm developers about the best areas to place turbines.”

Mark Z. Jacobson already worked out a framework for powering the entire world from wind, water, and sun alone. The late John Blackburn, Ph.D., showed us how to power North Carolina with sun, wind, and hydro, plus less natural gas than NC uses now. Now Jacobson is working out the details of implementation.

-jsq

PS: Owed to Seth Gunning.

Change the Atomic Energy Act? How about change the Georgia Electric Territorial Act?

In reaction to the NRC denying a nuclear permit for Calvert Cliffs, some nuclear backers suggest changing the Atomic Energy Act of 1954 to permit majority foreign ownership of nuclear reactors. What will they suggest next? Asking Iran to invest in U.S. nukes?

Steve Skutnik wrote for http://theenergycollective.com 5 September 2012, A cost-free way to open up nuclear investment,

If this seems entirely backward in a world of global production and investment, that’s because it is. The current regulation is an artifact of the Atomic Energy Act of 1954, which first authorized private ownership of nuclear facilities. (Prior to this—per the Atomic Energy Act of 1946, all nuclear technology was considered a state secret, during the short time in which the U.S. enjoyed a monopoly on the technology.)

Is there any real compelling reason for restrictions on foreign ownership and investment in nuclear facilities to exist at a time when the U.S. holding a monopoly on the technology has long since passed? Issues of safety here of course are irrelevant—the facilities would be licensed and regulated by the NRC, just as any other nuclear facility is now. About the only salient objection is the political one—i.e., the implications of a foreign entity maintaining controlling ownership in key infrastructure. (Although it’s hard to see anyone getting particularly upset about the reverse—U.S. entities owning a controlling stake in infrastructure in other nations.)

Yeah, sure, strict regulation will deal with that, just like it prevents fracking from setting drinking water on fire, or BP from poisoning the Gulf. The new NRC head is maybe well-meaning, but it’s the same NRC that gave Vogtle 1 a clean bill just before it had to shut down and the same NRC that’s ignoring cancer in Shell Bluff.

Oh, by the way, the article gets to the main point eventually:

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NRC rejects nuke permit for EDF in Maryland

French nuclear operator Électricité de France (EDF) was denied a license last week for the proposed Calvert Cliffs nuclear reactor in Maryland, because the Atomic Energy Act of 1954 prohibits majority foreign ownership of nuclear plants. EDF now has 60 days to find a U.S. partner, or give up the project. Who could the possible suitors be? Hint: think southeast.

The handwriting was on the wall two years ago when Constellation Energy pulled out of the project. Jim Polson and Alan Katz wrote for Bloomberg 10 October 2010, Constellation Drops Nuclear Plant, Denting EDF’s U.S. Plans,

Constellation Energy Group Inc. pulled out of negotiations on a $7.5 billion loan guarantee to build a nuclear reactor in Maryland with Electricite de France SA, potentially damaging the French utility’s U.S. expansion plans and the companies’ partnership.

The cost of the U.S. government loan guarantee that the companies’ joint venture, UniStar Nuclear Energy, would need to build the Calvert Cliffs 3 reactor is too high and creates too much risk for Constellation, the Baltimore-based utility said in a statement yesterday. The statement said the next step is up to EDF. Enlarge image U.S. Deputy Energy Secretary Daniel Poneman

In a letter Oct. 8 to Daniel Poneman, deputy secretary of the U.S. Department of Energy, Constellation said it received a government estimate that the venture would have to pay about $880 million to the U.S. Treasury for the loan guarantee, “dramatically out of line with both our own independent assessments and of what the figure should reasonably be.”

Constellation’s decision may make it more likely that the U.S. utility will exercise a put option forcing EDF to buy as much as $2 billion of Constellation’s non-nuclear power plants, said Ingo Becker, head of utilities sector research at Kepler Capital Markets.

“EDF very clearly said if they exercise the put, this thing is over,” Becker said. “Constellation may have just turned around the calendar and pulled out of the new build before exercising the put, anticipating EDF’s reaction.”

In a letter Oct. 8 to Daniel Poneman, deputy secretary of the U.S. Department of Energy, Constellation said it received a government estimate that the venture would have to pay about $880 million to the U.S. Treasury for the loan guarantee, “dramatically out of line with both our own independent assessments and of what the figure should reasonably be.”

Meanwhile, Southern Company is still trying to reduce what it has to pay for its $8.3 billion federal loan guarantee.

Back in Maryland, the news got worse for the nuke last year. EDF asked for the state’s help, but didn’t get the answer it wanted. Scott Dance wrote for Baltimore Business Journal 16 December 2011, EDF: Constellation-Exelon settlement hurts Maryland nuclear industry,

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Where would Georgia Solar Utilities Inc. get enough land for 80 MW solar generation?

Plant Branch in Georgia Where will Georgia Solar Utilities Inc. get the 2,200 acres it says it needs to build 80 MW of solar generation? Well, it’s supposed to be “adjacent to Georgia Power Co’s coal-burning Plant Branch near Milledgeville, Ga.”, so let’s look there.

Plant Branch Location Map A brochure on Plant Branch by Georgia Power (undated, but last date mentioned is 1998, so I’m guessing 1999) says:

Located on 1,900 acres on Lake Sinclair in Putnam County between Eatonton and Milledgeville, Plant Branch was the first million-plus-kilowatt electric generating station to operate on the Georgia Power system. It is named for Harllee Branch Jr., former chairman of the board of Southern Company and president of Georgia Power. Construction on the plant began in 1961, and by the summer of 1969, Coal pouring onto pile four units were in operation. The 1,539,000 kilowatts generated by Plant Branch provides enough electrical power for 342,000 households.

And now Plant Branch will be among the first to close coal-generating units. According to Melissa Stiers for GPB News 12 July 2011, Georgia Power Closing Three Plants,

Two coal fired units at Plant Branch in Milledgeville will close in 2013. That’s a result of federal regulation tightening air pollution controls. The company has said it’s too costly to upgrade those units.

Plant Branch across Lake Sinclair As we know, Georgia Power’s parent The Southern Company claimed it was incompetent to deal with the new EPA regulations even though it had already announced the Plant Branch closures (amounting to about 770 MW), and later SO announced 4,000 MW of coal plant closures.

While the various news stories keep saying Plant Branch is in Milledgeville, actually, it’s on the other side of Lake Sinclair, closer to Eatonville, Plant Branch site in Putnam County qpublic map and in Putnam County. A quick glance at the Putnam County Tax Assessor database maps shows that the land parcel containing Plant Branch is 913.87 acres, much of which isn’t actually used by the plant. And Georgia Power owns a total of more than 3,000 acres adjacent to that site. So I’m guessing the 2,200 acres figure is simply around 3,100 total Georgia Power acres minus 913 acres for the present Plant Branch site.

Estimates for land needed for a megawatt of solar power generation range Continue reading →

Company to build 90 MW solar and become a utility

What to do if you can’t interest Georgia Power in building solar? Do it yourself, and do enough so you can be a utility yourself. That’s the loophole in the 1973 Electric Territorial Act that FPL and JEA use to burn coal at Plant Scherer in Georgia and export the power to Florida. Now Georgia Solar Utilities Inc. is using the loophole for a better purpose: building almost twice as much solar generation as Georgia Power’s meager 50 MW.

Georgia Solar Utilities Dave Williams wrote for the Atlanta Business Chronicle yesterday New Georgia utility pitches solar plant: A new utility is planning to build a $320 million solar power plant on 2,200 acres adjacent to Georgia Power Co’s coal-burning Plant Branch near Milledgeville, Ga.

Georgia Solar Utilities Inc. initially approached Georgia Power, a unit of Southern Co. (NYSE: SO), with a proposal to build the plant and sell it to Georgia Power through a power-purchasing agreement.

Georgia Power is retiring two coal-fired units at Plant Branch, part of a move to reduce the Atlanta-based utility’s reliance on coal.

But when Georgia Power officials declined to take part in the project last May, Georgia Solar Utilities executives decided to build the plant on their own and operate it as a new utility independent of Georgia Power.

Once cost prohibitive, solar energy has become competitive with fossil fuels because of the rising costs of coal and tighter government regulation of coal emissions, said Robert Green, founder of Georgia Solar Utilities.

“When you don’t have to buy coal or worry about environmental hangovers, it overwhelms the costs of fossil fuels, Green said Thursday after presenting the proposal to the Georgia Public Service Commission’s Energy Committee.

Some say the PSC can’t approve such a utility because of that 1973 law. I suspect that if they don’t approve this proposal, the next one will be even harder to turn down, and the next one, as they become even more competitive.

How competitive?

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Vogtle circular firing squad delaying opening

Southern Company and the other owners of Plant Vogtle are blaming the contractors (who are suing them) for further delays in construction. How much money will they waste before they never open?

Kristi E. Swartz wrote for the AJC yesterday, Disputed costs at Vogtle rise,

Georgia Power and a group of municipal and cooperative electric companies are building twin 1,100-megawatt reactors, the first in the United States to win permits in 30 years. The total expected cost of the project is $14 billion, but potential cost overruns at Vogtle, located in Waynesboro in east Georgia, continue to grow, according to the recent Southern Co. regulatory filing.

Delays in getting federal licensing approvals for the new reactor design and then for the entire project have been cited as the chief culprit.

Because of the dispute with contractors over the additional costs, “the owners are evaluating whether maintaining the currently scheduled commercial operation dates of 2016 and 2017 remains in the best interest of their customers,” the filing said. The total amount of the cost overruns could be well over $900 million; Georgia Power owns 45.7 percent of the project, so its share is $425 million, the latest filing said. Originally the overrun was projected at $400 million when the issue was first made public in April.

Up another $25 million since April? How long until it gets into billions of cost overruns? Which will be paid by whom?

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