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Released April 24, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Georgia Power Company (Atlanta, Georgia) is still putting the finishing touches on Vogtle Unit 4, but extraordinary electric demand growth that is about 6,200 megawatts (MW) higher than forecast in early 2022 caused the utility to apply to Georgia utility regulators for the right to build and buy a mix of resources that will keep the lights on through the winter of 2030-31.
The regulators on April 16 approved Georgia Power's 2023 integrated resource plan (IRP) update proposal, with some modification, in a 4-0 vote, with one commissioner abstaining.
Some clean energy advocates and consumer groups opposed the proposal, but it had support from a variety of businesses, business groups and renewable energy supporters.
Even some business groups that backed the update warned that the addition of new fossil-fueled generation could hamper the state's future economic development efforts by making the state less attractive for organizations committed to lowering their carbon footprint.
Georgia Power officials told regulators that the utility had recently experienced "extraordinary" customer growth, largely driven by data centers, the proliferation of which has caused utilities across the country to upwardly revise their annual load growth estimates. For more on that, see April 16, 2024, article - Data Center Construction Propels Electric Load Growth and Utility Capex.
Typically, utility electric load demand grows at about 1% per year. But across its three-state system, executives at corporate parent Southern Company (NYSE:SO) (Atlanta, Georgia) told investors February 15 that retail electricity sales are expected to grow by 1% to 2% in 2024 and 2025, then zoom to an average of 6% per year for the 2025-2028 period. The call with investors was to announce fourth-quarter and full-year 2023 earnings. Data centers are one of Southern's top commercial customer segments.
Click on the image at right to see a chart of the growth in the number of Georgia Power's new large-load customers and the electric load, in megawatts, associated with those new customers.
In its application to regulators, Georgia Power listed three reasons for its request:
Last October, in its 2023 IRP update filing, which the Georgia regulators approved with minor changes April 16, the utility predicted electric load would jump about 6,600 MW by 2030--roughly 6,200 MW more than what the utility predicted in its previous IRP, filed January 2022.
Last October, Georgia Power Chairman, President and Chief Executive Kim Greene said, "Georgia has continued to experience rapid economic growth since the filing of our IRP in early 2022. Many businesses coming to the state are bringing large electrical demands at both a record scale and velocity. It's an exciting time to have the privilege to serve this great state, and this IRP Update outlines how Georgia Power can best continue supporting that historic growth while continuing to provide our customers with the clean, safe, reliable, and affordable energy they expect and deserve."
In an April 16 statement, Georgia Power projected that its 2023 IRP update would provide customers with more than $500 million in net benefits for 2026-2028. That works out to a decrease of about $2.89 per month for the typical residential customer who uses 1,000 kilowatt-hours (KWh) of electricity per month.
On April 16, Georgia utility regulators approved Georgia Power's request to:
The regulators on April 16 approved Georgia Power's 2023 integrated resource plan (IRP) update proposal, with some modification, in a 4-0 vote, with one commissioner abstaining.
Some clean energy advocates and consumer groups opposed the proposal, but it had support from a variety of businesses, business groups and renewable energy supporters.
Even some business groups that backed the update warned that the addition of new fossil-fueled generation could hamper the state's future economic development efforts by making the state less attractive for organizations committed to lowering their carbon footprint.
Georgia Power officials told regulators that the utility had recently experienced "extraordinary" customer growth, largely driven by data centers, the proliferation of which has caused utilities across the country to upwardly revise their annual load growth estimates. For more on that, see April 16, 2024, article - Data Center Construction Propels Electric Load Growth and Utility Capex.
Typically, utility electric load demand grows at about 1% per year. But across its three-state system, executives at corporate parent Southern Company (NYSE:SO) (Atlanta, Georgia) told investors February 15 that retail electricity sales are expected to grow by 1% to 2% in 2024 and 2025, then zoom to an average of 6% per year for the 2025-2028 period. The call with investors was to announce fourth-quarter and full-year 2023 earnings. Data centers are one of Southern's top commercial customer segments.
In its application to regulators, Georgia Power listed three reasons for its request:
- an increased and accelerated demand for electricity
- a decrease in the amount of uncontracted, existing generation resources in the wholesale market, and
- the time required to build or buy energy from new resources to meet capacity needs arising as early as the winter of 2025/2026.
Last October, in its 2023 IRP update filing, which the Georgia regulators approved with minor changes April 16, the utility predicted electric load would jump about 6,600 MW by 2030--roughly 6,200 MW more than what the utility predicted in its previous IRP, filed January 2022.
Last October, Georgia Power Chairman, President and Chief Executive Kim Greene said, "Georgia has continued to experience rapid economic growth since the filing of our IRP in early 2022. Many businesses coming to the state are bringing large electrical demands at both a record scale and velocity. It's an exciting time to have the privilege to serve this great state, and this IRP Update outlines how Georgia Power can best continue supporting that historic growth while continuing to provide our customers with the clean, safe, reliable, and affordable energy they expect and deserve."
In an April 16 statement, Georgia Power projected that its 2023 IRP update would provide customers with more than $500 million in net benefits for 2026-2028. That works out to a decrease of about $2.89 per month for the typical residential customer who uses 1,000 kilowatt-hours (KWh) of electricity per month.
On April 16, Georgia utility regulators approved Georgia Power's request to:
- Contract with sibling utility Mississippi Power (Gulfport, Mississippi) for 750 MW of capacity and energy. It is believed this contract will be fulfilled with coal-fired generation that Mississippi Power was scheduled to retire.
- Construct three dual-fuel (gas and fuel oil) combustion turbine generators totaling up to 1,400 MW at Plant Yates in Coweta County, Georgia.
- Contract with the Santa Rosa Energy Center for up to 230 MW of capacity and energy from a gas-fired plant in Pace, Florida.
- Potentially acquire an ownership interest in an existing generating asset within the Southern Company footprint. No details were provided as to the size of this interest or the fuel it uses.
- Build, own and operate up to 500 MW of battery energy storage systems (BESS). Georgia Power had requested the right to build up to 1,000 MW of storage. Regulators agreed with the total but decided that third parties should build and own the other 500 MW of BESS capacity.
- Increase its demand response and distributed energy resource (DER) programs.
- Re-evaluate the operating status of several generators that were slated for retirement by the end of 2028 under a previous regulatory proceeding. These generators include, but are not limited to, the coal-fired Plant Scherer Unit 3, an 891-MW generator that began operating in 1987.
- Invest in transmission assets necessary to accommodate the proposed resources and load forecasts in the 2023 IRP update.
The IRP update approved April 16 did not cover Georgia Power's two-unit addition at the Alvin W. Vogtle Nuclear Plant. Vogtle Unit 4 is expected to begin commercial operations during the current quarter. Georgia Power owns about 45.7% of Unit 4, which will have about 1,117 MW of generating capacity. The utility owns the same percentage of Vogtle Unit 3, which began commercial operations last summer.
The two-unit addition, the first new nuclear power construction project in the U.S. over three decades, has been plagued by cost overruns and construction delays. The project, which has three other co-owners, has a capital cost of about $32 billion. Last December, the PSC approved a settlement in which Georgia Power will absorb about 25% of its proportional share of the costs to construct and finance the two new 1,117-MW units. The utility had invested about $10.2 billion as its proportional share to build the two new units, but in the settlement, it agreed to absorb about $2.6 billion of those costs and not charge customers for them. For more on that, see December 14, 2023, article -- Georgia Utility Regulators to Vote December 19 on Georgia Power Costs for Vogtle Units 3 and 4.
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