Should Georgia Power customers pay two to three times the conventional cost of electricity on a trio of energy contracts to support rural job growth?
That is the question facing state regulators on the Public Service Commission, who are scheduled to vote Tuesday on the company’s plan to procure more energy from burning wood known as “biomass.”
Georgia is a biomass titan. Wood pellets from trees harvested and processed in the Peach State produce a lot of power in Europe and the United Kingdom, where they have been used as a coal replacement. Now, Georgia Power wants to add a significant amount of biomass-generated power here.
The proposal has drawn pushback from environmental and consumer advocates who say biomass is expensive and polluting. An independent evaluator testified that the new biomass projects will cost Georgia Power customers two to three times more than other power sources.
Regulators have already approved a series of rate increases since 2022 that could add about $45 to the average customer’s monthly bill by early next year, a recent analysis by the Southern Environment Law Center found. Georgia Power and the commission have not released their own estimates.
“I urge you all to consider the realities of how Georgia Power bill payers will be affected by a potential decision approving (the biomass proposal),” Aradhana Chandra, an attorney with the SELC, said in a recent hearing on the issue.
Some governments have treated biomass as a renewable energy source because, unlike fossil fuels, trees can be replaced. Many climate scientists have criticized that logic, saying biomass burns dirtier than coal does and deforestation remains a problem on a global scale.
At the hearing, neither Georgia Power nor PSC regulators who spoke in favor of biomass disputed the relatively high cost. Rather, they argued that the projects will provide economic benefit to rural areas.
Robert Highsmith, an attorney for Georgia Power, said the company was simply following regulators’ directives. In 2022, the commission added up to 140 megawatts for biomass to the company’s integrated resource plan, the utility’s road map for providing electricity.
The three contracts for which Georgia Power is seeking approval represent nearly 80 megawatts of capacity. One megawatt is enough to power 400 to 900 homes.
“Cost isn’t the only appropriate consideration here,” Highsmith said. “It’s not uncommon for the company to procure resources with a calculated negative net benefit so as to follow the directives of the commission. This is not the first time that’s happened.”
Commissioner Tim Echols said procuring biomass would create forestry and trucking jobs, and avoid burning waste from lumber harvesting outside without pollution controls.
“I know we’re paying more for this, but without it, this stuff gets burned right there in those communities,” Echols said. “We represent everyone in state, not just Georgia Power ratepayers.”
Timber is big business in Georgia. The forestry industry says it supports more than 148,000 jobs in the state. PSC Chairman Jason Shaw called forestry the “lifeblood” of South Georgia.
“They’re looking at how to create new markets for that wood,” Shaw said, framing the biomass contracts in the context of broader efforts by lawmakers to support rural economic development.
Commissioner Lauren “Bubba” McDonald said asking Georgia Power customers to support biomass plants in rural areas was no different from asking them to support the Vogtle nuclear plant in Burke County.
“Yes, there’s a little investment … but the benefits far exceed the costs,” McDonald said.
Commissioner Tricia Pridemore did not directly address her colleague’s comments. Instead, she read the commission’s mission statement, which is to exercise its authority to ensure that consumers receive safe, reliable and reasonably-priced electricity and other services from competent providers.
The mission does not include anything about supporting economic development.
The independent evaluator’s report, prepared by energy consultancy Accion Group, said the prices of the contracted biomass were “exceptionally high” when compared to the company’s avoided cost. But the actual numbers are considered a trade secret and were not included in the public version of the report. Chandra, the SELC attorney, said the extra cost to customers amounted to billions of dollars.
Several residents also weighed in, questioning the cost and raising health and environmental concerns. Others said they found the commissioners’ preoccupation with the timber industry odd.
Lisa Coronado said the same economic arguments being applied to biomass could have been made for expanding incentives for rooftop solar, which regulators chose not to do.
“When the solar installation industry said that expanding net metering was necessary to maintain and grow the industry, you didn’t jump in to support them and make that argument,” Coronado said.
Editor’s note: This story has been updated to correct the spelling of Commissioner Lauren “Bubba” McDonald’s name.
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