Georgia Power says fleet additions won’t raise rates. Others disagree

Georgia Power is seeing growing demand for electricity, but critics are questioning the urgency of the utility’s request for more generation capabilities and its claim the investments will lower customers’ bills.

The company wants to build new oil and gas turbines, develop battery and solar systems, and buy power from out of state to meet what it says is an “extraordinary” wave of new demand.

The Georgia Public Service Commission (PSC) held two days of hearings last week on Georgia Power’s request. Here’s what you need to know.

What Georgia Power wants

Georgia Power says its new modeling shows demand on its system in summer could grow by 7,100 megawatts (MW) through 2031. That’s 28 times more than the company projected roughly two years ago. Winter demand could jump by 6,600 MW by 2031, too, a 17-fold increase.

Electric vehicle and battery factories are bringing new demand, but Georgia Power executives have testified that data centers are responsible for 80% of its expected new load.

To meet their needs, Georgia Power wants to:

Flawed forecasts?

Georgia Power says it could face a capacity shortfall as soon as the winter of 2025/2026, three years earlier than previously projected. Given the urgency, the company has asked the PSC to allow its fleet additions without going through a competitive bidding process, which is normally required to evaluate the most cost-effective and reliable solutions available.

But the PSC staff and its analysts said their forecasts show the company has more time than it’s letting on — their modeling didn’t reveal a deficit until the winter of 2026/2027.

“We conclude that the forecast produced by Georgia Power is likely skewed to show load realization sooner and in greater quantity than is likely to materialize,” Robert Trokey, the director of the PSC’s electric section, testified.

Competitive bidding

PSC staff said the commission should allow the company to continue buying electricity from Mississippi Power and Florida. Doing so, they said, would buy Georgia Power enough time to accept bids to fill its other electricity needs and determine which sources provide the best value for ratepayers.

But for now, staff recommended the commission deny the company’s plan to build new gas units and battery installations.

“What you’re proposing is quite expensive,” said Tom Newsome, the PSC’s director of utility finance, who contended Georgia Power should go through a request for proposals “to make sure it’s cost effective.”

The company, meanwhile, has already begun work on the new oil and gas burning units at Plant Yates, and could seek to charge ratepayers for the project’s sunk costs, even if the turbines are not approved by the commission. Georgia Power and an expert for an environmental group have both said the company’s expenses from developing the Yates units would be roughly $250 million if the project is cancelled.

Costs in question

Georgia Power executives have repeatedly testified that adding electricity assets to serve data centers, EV factories and other facilities coming to Georgia will put “downward pressure” on rates.

Last week, PSC staff witnesses disputed that claim, saying that may not be true for all customer classes. Georgia Power’s residential customers — the company’s largest group — have faced a series of commission-approved rate hikes that will ultimately increase the typical residential customer’s bill by about $38 per month.

Staff suggested Georgia Power show how the costs of the new electricity resources it wants would affect each class of ratepayer in its next round of testimony.

It was unclear if the company will provide the information. Georgia Power spokesman John Kraft said, “We are currently developing potential rebuttal testimony in this case, and we can’t get ahead of that process or what we may include.”

Climate concerns

Georgia Power has said it is committed to renewable energy, but about 70% of the capacity additions it wants in this case are from fossil fuel sources. The burning of fossil fuels is the biggest contributor to climate change.

And after the planet just endured its hottest year on record, Georgia Power’s plan to add more oil, gas, and coal power to its system drew pushback from doctors, students and other residents during last week’s hearings.

“Fossil fuels including coal, methane gas and oil have served our needs for reliable electricity in the past, but they no longer serve us,” said Dr. Preeti Jaggi, a pediatrician and infectious disease specialist. “They are outdated and are harming our health.”

Credit: John Spink

Credit: John Spink

Several expert witnesses in the hearings proposed cleaner alternatives.

John Kaduk, a senior public utilities engineer on the PSC staff, suggested the company develop a pilot program to encourage homeowners and small commercial customers to install battery systems. The batteries, he said, could boost reliability and give Georgia Power extra resources to draw on at times of peak electricity demand.

Others said the company should do more to leverage the billions of dollars in incentives President Joe Biden’s climate and health care law, the Inflation Reduction Act, has made available for solar and battery storage projects.

Georgia Power will have a chance to respond during the next round of hearings scheduled for March 27 and 28. The five elected members of the PSC will take a final vote on the company’s plan on April 16.

A note of disclosure

This coverage is supported by a partnership with Green South Foundation and Journalism Funding Partners. You can learn more and support our climate reporting by donating at ajc.com/donate/climate/