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Friday, September 09, 2016

NOTES FROM THE SENATE, SEPTEMBER 9, 2016

THE GEORGIA PUBLIC SERVICE COMMISSION AND GEORGIA'S CHANGING ENERGY MIX

The Georgia Public Service Commission (PSC) plays a vital role in the electricity generation sector of Georgia. The PSC fully regulates Georgia Power and partially regulates local electric membership corporations (EMCs). This includes approving electricity rate increases and decreases, approving new power plants, and perhaps most importantly assessing Georgia Power's Integrated Resources Plan (IRP) which is filed every three years and details how Georgia Power will provide electricity for the state for the next 20 years. The PSC is continually assessing natural gas pipeline safety as well as staying up to date on electrical grid technologies and changing federal regulations, such as the Clean Power Plan, and how they impact electricity generation. The PSC also provides consumer services for ratepayers to resolve complaints about any of the entities regulated by the PSC.

It is up to the PSC to assure that the ratepayers of Georgia are being charged fairly for their use of utilities while also insuring that the electric companies remain viable. With five elected commissioners presiding, PSC is similar to a judicial body. In rate cases, the commission hears testimony by representatives of the service providers, concerned parties, and from staff. The commission then decides to allow a rate increase or decrease.


NUCLEAR ENERGY IN GEORGIA

The PSC has been in the news recently for their role in the construction of the two new nuclear reactors at Plant Vogtle near Waynesboro, Georgia. In March of this year, Georgia Power announced they were beginning a study for a third possible nuclear power plant in Stewart County, south of Columbus. The PSC decided in the 2016 IRP, which was approved in July, to allow Georgia Power to spend $99 million for a site suitability and Combined Operating License (COL) development work. The new plant would have an initial projected construction date around 2030.The PSC is responsible for assuring the costs of construction are reasonable and prudent. This determines whether cost overruns can be passed on to ratepayers. Some may wonder why Georgia needs more nuclear reactors. This is part of a greater shift in the way Georgia and the United States, as a whole, generates electricity.


COAL DOWN - NATURAL GAS UP

Since 2000, the mix of energy sources used for energy generation has changed considerably. In 2000, 64.7% of the electricity generated in Georgia was fueled by coal. Coal had declined to 53.3% of all electricity generated by 2010 and further decreased to 36% by 2014. The decreases in coal usage have been made up by increases in other energy sources -- mostly natural gas. As a comparison, natural gas made up only 3.4% of the electricity generated in Georgia in 2000, increased to 17.4% by 2010 and to 32.6% by 2014. The other primary source of energy for Georgia is nuclear power. Currently, there are two nuclear power plants each having two nuclear reactors: Plant Vogtle near Waynesboro and Plant Hatch near Baxley. Collectively, nuclear power resources generated 25.9% of electricity within the state in 2014.


OTHER ENERGY FORMS GROWING
The remaining portion of electricity is currently generated using through biomass and hydroelectric plants. Biomass and hydroelectric plants make up 5.7% of the electricity for the state. Most biomass energy is generated by burning wood pellets and wood scraps which are generated by the timber industry. This form of energy is technically carbon neutral because the amount of carbon dioxide released by burning the wood is approximately equal to the amount of carbon dioxide the trees absorbed while maturing. Hydroelectricity is generated when water is diverted from a river or a lake and it is used to turn a turbine, generating electricity.


FEDERAL AIR QUALITY REGULATIONS - COAL'S DEMISE

There are two main reasons for the shift from coal dominant energy generation to a more diversified mix of energy sources. A key reason is the cost of natural gas has plummeted compared to coal. In turn, the electric industry has transitioned plants from coal-fired power plants to natural gas to save costs. This has been achieved by building new natural gas plants and by converting coal power plants to use natural gas. The other key reason for the shift is environmental regulations issued by the federal government, such as the Clean Power Plan which aims to reduce carbon emissions nationally by 30% under 2005 levels but takes into account each state's energy mix as a 2012 baseline. Currently, the US Supreme Court has stayed Clean Power Plan implementation until pending judicial review. A natural gas power plant emits fewer pollutants, including greenhouse gases like carbon dioxide and particulates than a coal-fired power plant does.

As environmental regulations have become more challenging, it makes operating coal-fired power plants difficult. This has made considerations toward carbon neutral electricity generation from nuclear, solar, wind, and biomass energy sources more relevant.

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