The Georgia Public Service Commission is set to vote Sept. 17 on Georgia Power’s proposal to burn wood pellets and other organic materials to generate energy and has raised environmental concerns and high costs being passed on to customers.
State regulators heard testimony Thursday from Georgia Power officials about the utility company’s application to add 80 megawatts of biomass-fueled generation in the next couple of years. The PSC will vote next month on biomass purchasing agreements that include a 10-year contract with International Paper for a total of 8 megawatts of biomass from mill facilities located in Macon County and Chatham County. The largest proposed contract is a 30-year agreement with Altamaha Green Energy for 70 megawatts of biomass from its Wayne County facility.
Wood is still the largest energy resource for biomass, which is energy produced from plant or animal waste. Critics argue that wood burning plants produce inefficient, unclean energy and pollute vulnerable areas.
Aradhana Chandra, an attorney with the Southern Environmental Law Center, who is representing Georgia Interfaith Power and Light in the case, questioned the cost and economic value of the biomass agreements, particularly with Altamaha Green Energy.
The financial details of Georgia Power’s purchase agreement for the biomass projects have not been disclosed publicly.
Georgia Power officials acknowledged Thursday that the energy for Altamaha is several times higher than the $77 per megawatt hour estimated average cost of new energy sources for 2028 according to the U.S. Energy Information Administration.
The five-member PSC will also consider testimony from Harold Judd, president of Accion Group LLC, an independent evaluator who argued that the costs of the biomass projects were “exceptionally high.”
Judd said that the cost to ratepayers is three times the avoided cost, which is the minimum amount an electric utility is required to pay an independent power producer.
Chandra asked Georgia Power officials Thursday about an avoided cost that in simple terms is calculated as the economic value of one unit of energy.
Georgia Interfaith, SELC and other consumer and clean energy groups have spoken out against Georgia Power’s rising electric prices. The average residential Georgia Power customer’s bill is projected to rise nearly $44 a month over a two-year period, including hikes from the Plant Vogtle nuclear power expansion project and fuel costs.
“The price of one unit of energy from the Altamaha PPA, it looks like it’s well over three times the avoided cost, or the economic value of a unit of this energy,” she said.
Jeffrey Grubb, director of resource planning at Georgia Power Company, said that the biomass contracts presented to PSC were the result of a competitive bidding process.
“I think the important thing to note here is biomass is a unique resource, and all resources have their pros and cons and uniqueness to them,” he said.
Jeffrey Weathers, director of resource planning for Southern Co. Services, said generic estimates from the Energy Information Administration cannot be directly compared with the terms of the contracts presented to the Georgia PSC for evaluation.
“We went through the entire evaluation process, all of the steps to evaluate all the costs and benefits,” Weathers testified Thursday. “It was less than the amount that we were seeking, less than the 140 MW. Therw was no there was no price cap, there was no screen out based on economics.”
The biomass projects were included in Georgia Power’s 2022 Integrated Resource Plan, a three-year blueprint which was amended at the request of PSC Chairman Jason Shaw to require Georgia Power seek bids to develop up to 140 megawatts of biomass.
Shaw and groups like the Georgia Forestry Association tout biomass as a diverse, reliable energy source that provides economic benefits to the timber industry.
The independent evaluator’s economic report estimates the economic value of the three projects at $300 million in capital expenditures, $17 million in local construction contracts and $3.2 million in increased pay for crews. The projects are also estimated to increase county tax and school tax revenue by $6.5 million over 15 years.
Shaw said Thursday that Judd’s cost estimates could have been based on months old economic data.
Shaw embraced biomass after the south Georgia resident witnessed the large number of fallen trees and debris in the aftermath of Hurricane Michael in 2019.
“Isn’t it true that these (construction) costs could have increased quite a bit based on inflationary pressures that have affected almost every construction project in this country?” he asked.
This story comes to GPB through a reporting partnership with Georgia Recorder.
