Regulators approve 20-year Georgia Power plan outlining fossil unit retirements

The 2,580-MW Scherer coal plant's unit 3 will close by the end of 2028, according to a stipulation agreement between Georgia regulators and Georgia Power approved July 21.
Source: Georgia Power

The Georgia Public Service Commission on July 21 approved a stipulation agreement for Georgia Power Co.'s 2022 integrated resource plan, setting forth timelines to shutter some of the utility's largest coal units over the next decade and transition to cleaner energy resources.

The agreement includes expectations that Georgia Power will close 29 coal ash ponds.

Absent from the final approved stipulation agreement is a timeline to shutter the 3,232-MW coal-fired Bowen plant. Commission staff left the timing of the retirement the four-unit plant up to the panel of regulators, describing its closure as a "close call economically." But during the meeting, commissioners voted unanimously to postpone a decision on Bowen units 1 and 2 until consideration of the utility's next scheduled IRP in 2025. Previously, Georgia Power had proposed shutting down Bowen units 1 and 2 by the end of 2027.

The Southern Co. subsidiary files an integrated resource plan, or IRP, with the Georgia PSC every three years to outline how it will deliver power to its 2.7 million customers over the next 20 years. (Docket No. 44160)

Retirements, power purchase agreements

In its initial IRP filed in January, Georgia Power proposed retiring and decertifying all of the coal units it controls except Bowen units 3 and 4.

The stipulation agreement regulators approved July 21 includes retiring and decertifying all Georgia Power-controlled coal units by 2028 except the Bowen plant. The units slated for retirement include the 1,744-MW Wansley plant's units 1 and 2 and the oil-fired unit 5A, as well as Boulevard's 18.6-MW oil-fired unit 1 by Aug. 31 of this year. The Scherer plant's 860-MW unit 3 and the 1,852-MW E.C. Gaston units 1-4 and E.C. Gaston CT are expected to retire by the end of 2028. The agreement cited "economic challenges" for the units as the reason for their closure. Georgia Power shares ownership of these plants with several other utilities.

The stipulation agreement also included approval of Georgia Power's plans to install effluent limitation guidelines controls for Bowen units 3 and 4 and Scherer units 1 and 2. Regulators approved a proposal by the utility to keep Bowen units 3 and 4 operating beyond 2028 for system reliability, but effluent limitation guidelines controls will have to be installed by 2028 in compliance with U.S. Environmental Protection Agency regulations, according to the stipulation agreement.

To facilitate those retirements, regulators approved a Georgia Power proposal to certify more than 2,000 MW of additional capacity from natural gas power purchase agreements, or PPAs, procured through its 2022-28 capacity request for proposals, along with a significant increase in renewable generation, the company said in its plan.

In the agreement, state regulators will also grant certificates of public convenience and necessity to Georgia Power's power purchase agreements from Wansley unit 7; unit 2 of the E.B. Harris Electric Generating Plant; Monroe Power units 1 and 2; and several agreements for the output of some of the 10 gas turbine units at the Dahlberg plant.

"With the exception of Bowen 1-2, staff's and the company's action plans aligned with respect to coal retirements and approval of PPAs," the stipulation agreement reads. "Staff and the company agree that the PPA resources that the Company proposed to acquire would be able to fill the capacity need at the time of plant retirements."

Coal ash

Of the 29 coal ash ponds Georgia Power expects to close, the utility said it planned to redistribute the ash from 19 to landfills or other ponds, or recycle it. The remaining 10 ponds are expected to be sealed in place, though environmental advocates argued the "cap-in-place" strategy risks soil and water contamination. The utility has countered that the U.S. EPA considers the option "protective of the environment."

The Georgia Supreme Court recently declined to take up a lawsuit filed by environmental advocates that argued state regulators gave the utility too much authority to determine the costs associated with coal ash cleanup. A U.S. Supreme Court ruling in June also limited the authority of the EPA to set federal carbon emission regulations.

Clean energy advocates argued in testimony that Georgia Power's 2022 IRP does not go far enough in expanding clean energy generation such as solar and falls short in its plan to close coal-fired power plants.

Georgia Power is also seeking an incremental 12% rate increase on average residential bills, including coal ash remediation costs, over the next three years, with a decision expected in December.

Renewables

Georgia Power plans to roughly double its renewable generation, adding 6,000 MW by 2035, and the approved IRP includes 2,300 MW over the next three years. That potential new capacity would expand Georgia Power's renewable portfolio to about 11,500 MW by 2035, the utility said previously.

As part of the IRP, regulators approved Georgia Power's largest single battery energy storage system project so far, the 265-MW McGrau Ford Battery Facility, with additional review expected prior to construction. Regulators also approved an additional 500 MW of battery storage.

Georgia Power has 17 hydroelectric generation facilities currently in operation and the approved IRP includes additional investments to the 9.6-MW Burton and 43.8-MW Sinclair Dam plants, which have been in operation since 1927 and 1953, respectively, according to S&P Global Market Intelligence data.

Commissioners put off further decisions regarding changes to solar net metering programs at the July 21 hearing. The PSC approved an income-qualified community solar pilot program, a distributed energy resource customer program and a demand-side management plan as part of the 2022 IRP.

The stipulation agreement also approved Georgia Power's 10-year transmission plan, though the utility must develop and file annual transmission update reports with the status of each project in the IRP on or before Feb. 28 each year.

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