“Demands to significantly increase the Company’s renewable procurement ignore this reality [of system instability] largely because Georgia Power, and not the Intervenors, is ultimately responsible for safely and reliably integrating these resources into and operating the system.”
– Georgia Power Company, June 24, 2019
Georgia Power didn’t need any new sources of generation and was, in fact, closing down still-useful plants to make room for the Plant Vogtle #3 and #4 (2,231 MWnuclear capacity). As such, the Company didn’t want nuisance solar. However, to appease the Georgia Public Service Commissioner (GPSC) commissioners, and to engage in greenwashing, the Company proposed in its Integrated Resource Plan (IRP) to purchase just enough intermittent solar to be politically acceptable. They were wrong.
Solaring Up … and Up
In the face of opposition, the Company compromised in a proposed settlement to increase future solar purchases. Even this didn’t work.
The Commission record has been to always order more solar than the Company proposes. So, in anticipation of this, the Company just filed its IRP brief and argued hard against any more solar.
Georgia Power asserted the amount of solar purchases in the proposed settlement was a balance between solar levels pushed by intervenors and the added cost and risk to ratepayers. Georgia Power went on at length to the describe the disruption renewable generation causes to the system. But this argument for balance could be made for any level of solar purchases.
In this instance the Company was correct: there were significant imposed costs on the system when solar was a large part of the generation mix. Georgia Power did not use the term “imposed costs,” but they described the risks of large amounts of solar generation.
During the IRP case the solar lobby had argued that since solar tax credits were to be reduced, the Company should accept more projects now. The Company, however, is not in the business of making other parties’ investments more profitable.
We admit that we may at times have been a little critical of Georgia Power’s policies. This time they are right: unreliable renewables do run up the cost to ratepayers and destabilize the grid. Georgia Power arguments are sound and can be applied to any level of forced renewable purchases.
A Crony Company
Georgia Power as a franchise monopolist practices cronyism to pass through controversial costs (such as the Vogtle nuclear expansion) and maximize its rate base. Satisfying the regulators, themselves captured by special interests, is the name of the game, not cost-minimization and consumer welfare. And so the aforementioned Brief makes such statements as:
- Pursuant to the Stipulation, the Company will procure the energy from 1,650 MW of renewable resources, continuing the Commission’s and the Company’s disciplined, market-based approach to growing renewable resources in Georgia
- The Company will retire and decertify Plant Hammond Units 1-4, Plant McIntosh Unit 1, and three small hydro facilities at Plants Langdale, Riverview and Estatoah. Although Plant Bowen Units 1 and 2 remain economic to operate and provide reliability benefits for customers, the Company agrees to limit capital expenditures for [coal-fired] Plant Bowen Units 1 and 2.
- … the Company will deploy up to 80 MW of battery energy storage systems to investigate how to operate these resources to maintain and enhance system reliability and offer additional support for intermittent renewable resource integration.
- … the Company’s demand side management (“DSM”) plan offers a well-balanced portfolio of residential and commercial energy efficiency and demand response programs to reduce the Company’s peak load and provide energy saving benefits to customers.
But Solar Too Far
The real problems of renewables are exposed by Georgia Power’s June 24th Post Hearing Brief. Salient quotations follow:
- In addition to the economic risk associated with entering into long-term PPAs, the addition of large quantities of renewable resources over short periods of time increases operational risk.
- The Company has limited operational experience, with approximate 1,000 MW of intermittent solar resources currently on Georgia Power’s system. With the addition of the 1,650 MW of renewable resources agreed to in the Stipulation, on top of the renewable resources already planned and committed, Georgia Power will have almost 4,000 MW of renewable resources online and generating by 2024.
- Demands to significantly increase the Company’s renewable procurement ignore this reality [of system instability] largely because Georgia Power, and not the Intervenors, is ultimately responsible for safely and reliably integrating these resources into and operating the system.
- Of the eight Intervenors who recommended substantial increases in the Company’s renewable procurements, only four offered analyses to support their recommendations. Those analyses, however, are based on unsubstantiated or unreasonable assumptions ….”
- GLSSA [Georgia Large Scale Solar Association] is recommending the Company add more non-dispatchable, intermittent resources than load can accommodate. Witness Olson admitted that at the procurement level he recommended, the Company would have “overgeneration” (i.e. dump energy) and that the limitations of the RCB Framework may become significant at higher levels of solar penetration.
- One significant detriment to adding additional renewable resources beyond that agreed to in the Stipulation is that it will continue to harm the economic viability of the Company’s coal units…. [T]here is no doubt that increasing renewable resource procurement in this case will require the Company to retire additional coal units sooner, and may have detrimental long-term effects on reliability and resiliency if done too quickly.
- Although the Company recognizes that renewable resources like solar and wind provide some limited capacity benefit (Tr. 2913), such capacity benefit based on current technology is neither firm nor dispatchable without being paired with energy storage.
One can only imagine what a free-market in electric service would truly produce compared to the wastes of franchised public-utility regulation. Consumers would surely do better, and more resources would be freed for the rest of the economy.