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Georgia Power and the staff of the Georgia Public Service Commission have reached a deal that would allow coal plants to stay open longer, include improvements to the power grid and launch a new pilot program for rooftop solar with battery storage. The proposal has angered some advocates, who argue it violates a previous agreement.
If approved by the five commissioners, the deal would wrap up the months-long process of hashing out Georgia Power’s long-term plan to make and deliver energy, known as an Integrated Resource Plan or IRP. They are scheduled to vote Tuesday.
“None of the parties got everything they wanted, and I can confirm that statement is true for Georgia Power,” said Steve Hewitson, a lawyer for the utility, in a hearing Thursday. “But in this case, despite our differences, the stipulating parties worked hard to ensure that customers come first and benefit most from this IRP.”
Compromises like this one, known as stipulated agreements, are typical when the commission considers complex, multifaceted issues like Georgia Power’s IRP. Interested parties often have criticisms and request changes to the details, which the commissioners can put to a vote if they choose. The commissioners often put forward changes of their own as well.
This time, though, several groups contend that the stipulation directly violates a previous agreement they signed.
“I am shocked that Georgia Power has chosen to violate an order of this commission,” said Jennifer Whitfield, an attorney with the Southern Environmental Law Center, which represents Georgia Interfaith Power and Light and the Southface Institute in these hearings. “I am shocked that Georgia Power has withdrawn its promised support for its expansion of energy efficiency programs.”
Georgia Power and the commission staff argued they haven’t violated the prior deal. Hewitson called that claim “silly and frivolous.”
A history of compromise
The conflict over the commission staff’s latest deal with Georgia Power dates back to the construction of two new nuclear reactors at Plant Vogtle, which notoriously took over a decade and came in at more than twice its original price tag. Georgia Power’s share of the total capital cost totaled $10.2 billion.
In 2023, as the second new reactor got ready to enter service, Georgia Power, the commission and the many interested parties faced down the challenge of how exactly to pass the costs of construction on to customers. The utility can charge customers for construction costs that the commission deems reasonable and prudent, so advocates were gearing up for a contentious fight over exactly which costs would count as prudent.
But then, instead, the commission’s staff unveiled an agreement. Consumer advocacy groups that had long clamored over nuclear costs, which they called wasteful and unfair, agreed to forgo their right to question those costs. As a result, power rates would increase to cover an agreed-upon portion of the Vogtle expenses. In exchange, Georgia Power agreed to other concessions, like an expansion of the income-qualified senior discount estimated to make some 96,000 additional seniors eligible for the savings.
“That’s one of the reasons that Georgia Watch made the difficult but I believe right and fair decision to support the settlement in the Vogtle three and four matter,” said Liz Coyle, executive director of that consumer advocacy organization.
The other reason, she said, was a promise involving the set of programs broadly known as demand-side management (DSM) – essentially, steps that reduce customers’ demand for energy, thereby reducing the amount Georgia Power has to generate with its supply-side resources, such as power plants. The Vogtle agreement called for a new, ambitious target for those programs: energy savings of at least 0.75% of the company’s annual retail sales.
That’s what Georgia Power originally proposed in this plan. But the commission’s public interest advocacy staff called for a lower target of 0.5%, and both parties agreed to the latter number in the new stipulated agreement.
To Coyle, Whitfield and other advocates, that move represents a violation of the Vogtle deal.
“I can’t tell you how disappointed I was to see the stipulation staff entered into with the company,” Coyle said. “Georgia Watch could not possibly sign on to a stipulation that specifically undoes something that was a difficult agreement for us to make.”
Commission staff and Georgia Power both argued they complied with the letter of the Vogtle agreement, which said the company would “propose and support” the higher DSM target and that staff reserved the right to “advocate for different (higher or lower) savings targets.”
“I don’t care what theater you bring to be impassioned about it, I don’t care at all,” said Hewitson. “Someone’s unrealistic expectation of what the plain language written on the paper means is not my problem.”
For some, the concern goes beyond the precise wording of the agreement. Commissioner Tim Echols argued that because the proposed stipulation goes against the understanding advocates had when they signed the Vogtle deal, it undermines trust and jeopardizes future agreements – a key component of how the commission does its job – regardless of whether staff and the utility have legally violated the Vogtle order.
“What is at risk here is these people signing on to future stipulations for years to come,” Echols said, referring to advocates like Coyle and Whitfield. “The action of that cutback…has been perceived as a violation. It is something you all should take seriously.”
Commissioner Tricia Pridemore disagreed, arguing the commission should consider the DSM proposal in the stipulation on its merits, not the passionate arguments of interested parties.
“We’re here to set policy and to tell Georgia Power how to operate their business as the state of Georgia,” she said. “No previous decision by a commission should tie the hands of a future commission decision.”
Pridemore argued the DSM proposal in the stipulated agreement improves on the existing programs, even though the savings target is lower than Georgia Power proposed and lower than called for in the 2023 Vogtle deal.
Forecasting demand
While the demand-side target dominated discussion at Thursday’s hearing, the bigger focus for most of the months-long proceedings has been the forecast for energy demand. That estimate of how much energy customers will need underlies the other decisions the utility and commission make in order to meet that demand – building power plants, shoring up transmission lines, making deals to buy power from other utilities.
Georgia Power is predicting a massive, rapid increase in demand for energy due mostly to new data centers, a forecast that the commission staff has sharply criticized as overblown. Staff reiterated that concern in a set of recommendations filed last week.
But the stipulated agreement calls it an “adequate method of forecasting” that’s “based on substantially accurate data.”
The deal does call for Georgia Power and commission staff to keep updating and refining their predictions in the coming years. A key criticism of the forecast from staff and other advocates has been that the large-scale data centers driving much of the predicted demand growth are a relatively new phenomenon, so there isn’t as much information about their behavior and needs as there is about more established industries. The agreement acknowledges that “lack of historic information” and lays out a schedule for Georgia Power to provide quarterly reports on new, large customers.
It also requires the utility to update its forecast in October, with input and a possible alternative forecast from the commission staff, before seeking bids for thousands of megawatts of new power generation. Analysts expect much of that power is likely to come from natural gas, which environmental advocates oppose because it generates greenhouse gas emissions that warm the planet.
Expanding renewables, extending coal
The lion’s share of new power generation outlined in the agreement – between 6,000 and 8,500 megawatts – comes from an all-source bidding process, meaning both fossil fuels, such as natural gas, and renewables, like solar, may be involved. Separately, the deal would approve a bidding process for up to 4,000 MW of utility-scale renewable energy.
It also expands renewables, considered a key component in combating climate change, in other ways. The deal includes a program that companies interested in using renewable energy have long advocated for that would allow those companies to add large-scale renewable energy projects to the grid on top of the renewables that Georgia Power is already adding.
“Our customers need energy now,” said Katie Southworth, who leads policy efforts in the southeast for the Clean Energy Buyers Association, which represents companies looking to buy carbon-free energy. “We have customers that are ready to bring shovel-ready projects.”
The stipulated agreement would also greenlight a pilot program that would promote rooftop solar arrays paired with batteries, and allow Georgia Power to draw on those batteries when energy demand is high – like on cold winter mornings, or in the hottest parts of the summer. The idea is that a network of solar-charged batteries could help meet demand and stave off the need to fire up emissions-intensive coal or gas plants.
Along with generating more energy, the deal would approve upgrades to eke more electricity out of current infrastructure – including power lines and the older nuclear reactors at Plant Vogtle. But it would delay some of the upgrades that Georgia Power requested.
The deal would also approve the utility’s plan to keep burning coal for energy at Plant Gaston and Plant Scherer beyond their previously proposed 2028 closure dates.