Greenlink’s analysis shows that energy efficiency and demand response alone could avoid about 3,000 MW of system peak demand, roughly the entire amount of new capacity Georgia Power wants to procure.
Atlanta, GA.- Today, Georgia energy regulators will vote on whether to grant an “emergency” request by the state’s largest utility for an additional hike in electricity generating capacity, citing extraordinary growth from industries such as data centers. If the request gets approved, it will put the state on an expensive energy path that locks in fossil fuels and potentially higher bills for the next 30 years. If that’s not troubling enough, it’s also completely unnecessary.
“The numbers don’t add up,” says Greenlink Analytics CEO Matt Cox. “Georgia Power has proposed building and buying power plants based on the highest demand scenario they designed while skipping the crucial due diligence built into the regulatory process first requiring an examination of energy efficiency measures and other ways to reduce power use.”
In October 2023, Georgia Power asked to add almost 3,400 MW (1,000 MW of fossil fuel power purchase agreements, 1000 MW of battery energy storage systems, and 1400 MW of new natural gas combustion turbines) to the system by the end of the decade. Just months earlier the company had finished its extensive three-year planning process that forecasted less than 400 MW for the same time period. The company says that the surge in energy demand is so pressing that skipping crucial steps in the regulatory process is worthwhile.
Building more capacity, such as adding more power lines and more "steel in the ground,” is the best way Georgia Power creates profit for the shareholders of the for-profit utility. While that may be best for shareholders, that may not be the best for the residents of Georgia. The Public Service Commission is meant to buffer against these self interests since it regulates and approves the utility’s electricity rates and energy forecasts. At risk is the climate, higher bills, and environmental justice.
Let’s allow the numbers to rise above the noise so we can hear what the data says.
Over the last 5 years, Georgia Power’s electricity load has decreased by about 1%. The amount of power required when consumers use the most electricity (aka peak demand) has been fairly consistent, around 16,500 MW. The new request depends on a prediction of load growth of 6%, or 14 times the average growth experienced in the past decade. And the Southeast’s grid already has energy reserves, or excess capacity, of 40% built into the system - the recommended amount is 15%.
“Building new fossil power plants is unjustifiable,” said Cox. “Our region has capacity for days, actually for decades.”
The first problem with Georgia Power’s request is that it’s not complying with the rules. The Public Service Commission requires that Georgia Power examines energy efficiency and demand response options before developing new power plants. That’s because energy efficiency is frequently the lowest-cost option for meeting Georgia’s energy use compared to supplying more power. Georgia Power knows how to do this; in their most recent federal filings, Georgia Power’s efficiency programs had a portfolio cost of 1.1 cents/kWh. Another cost effective option is demand response, which helps residents by shifting energy usage from peak times to help balance out the system's load.
Greenlink’s analysis shows that these options alone could avoid about 3,000 MW of system peak demand, roughly the entire amount of new capacity Georgia Power wants to procure.
Second, someone has to foot the bill for building new electric capacity and it won’t be Georgia Power. Large commercial and industrial consumers, like those running data centers, typically negotiate their electricity rates with Georgia Power and have the right to shop around, while residents don’t. Ultimately, these companies pay rates significantly cheaper than Georgia residents while being the leading cause for the demand for electricity to go up. Some of these companies will likely end up paying about 5 cents/kWh while the average Georgia resident pays 15 cents/kWh. And that’s the price without any new rate hikes.
What about when that load doesn’t materialize? Someone is stuck paying for the extra unnecessary capacity. Even while this case has been argued, several large manufacturers like Rivian have changed their development plans. Adjusted schedules and delays will further reduce the need for new supply.
Over the last year alone, residents’ power bills increased about 10%, or by about $14 each month. As utility bills continue to climb, it has a strong likelihood to continue to disproportionately affect the residents already struggling with these costs. About 28% of Atlanta already has high energy burdens. Black households are more vulnerable to high energy burdens than other races. As energy burden increases, so do other interdependent challenges, such as housing affordability.
“Georgia Power’s request is an equity issue as much as it’s a climate change one,” affirms Cox.
Third, building any new capacity shackles the state to fossil fuels (making us fossil fools) to meet demand. The proposed plan involves:
Building three oil-and gas-fired units at Plant Yates in Coweta County, Ga.
Developing battery storage
Buying power from a gas plant in Florida
Buying power from a coal plant in Mississippi that was slated to shut down due to poor economic performance
Instead of rapidly approving Georgia Power’s request, Greenlink Analytics would like to see the Public Service Commission enforce the existing due diligence built into the regulatory process and ask the utility to begin with energy efficiency and demand response, and hold them accountable to realizing its cost-effective potential, before locking in unnecessary and expensive fossil fuel options.