Solar becomes battleground for Georgia electricity regulation


By S. Heather Duncan

An upstart solar company co-founded by a Macon man is taking aim at Georgia Power’s monopoly on retail electricity. And its first solar project, which would be larger than any other in the state, is proposed for Middle Georgia.

Claiming that Georgia’s energy Goliath is blocking development of a potential major industry and cheap energy source, Georgia Solar Utilities’ Sept. 20 proposal to become the solar “mirror image” of Georgia Power is slated for consideration by the Georgia Public Service Commission at an administrative meeting Tuesday.

Georgia Solar Utilities proposes to build and operate two gigawatts of large-scale solar farms and sell the energy directly to residents. The first project would generate 80 to 90 megawatts of electricity in Putnam County near Georgia Power’s Plant Branch, where two coal-fired generators are slated to close next year, said Robert Green of Macon, president of Georgia Solar Utilities.

Georgia Power has only 11 megawatts of solar generation now. Fifty more are scheduled to go on the grid by the middle of 2015, but the company proposed them only in response to a challenge by Public Service Commissioner Lauren “Bubba” McDonald Jr.

Green said, “The reason we filed the way we did was because Georgia Power had steadfastly refused to develop (Georgia’s) solar resources,” estimated by Electricity Journal to be the third greatest among U.S. states.

Divided by source?

The Public Service Commission regulates Georgia Power and regional electric cooperatives, which divide up the state’s customers geographically under the Territorial Rights Act of 1972. Georgia Solar Utilities hopes to divide out its own customer base, not by geography but by energy source. Rather than seeking to topple the monopoly system, the company wants to join it by being granted the same privileges as Georgia Power.

Georgia Solar Utilities would become the sole provider for all customers who receive their energy from the sun, because, Green said, centralized planning is needed to set materials standards and to reduce weather vulnerability.

But Georgia Power attorney Kevin Greene told the PSC Energy Committee on Thursday that Georgia Solar’s “fundamental request is that the commission grant them a billion-dollar monopoly. The Legislature hasn’t authorized this commission to pre-select the winners and losers in solar.”

At that meeting, PSC employees recommended that the commission refuse to consider Georgia Solar’s request because it oversteps the PSC’s authority: It would require a change in Georgia law.

Green acknowledged that, but said, “There’s no way in the world the Legislature is going to do anything with us unless we have the support of the PSC.”

At the Energy Committee meeting, McDonald said, “I know what the Territorial Rights Act was all about: I was there, I voted on it, and I saw the passion of the cities, EMCs and Georgia Power. ... It’s worked well, it’s done a great job, but ... we’ve got, as a society, to take advantage of the God-given things we have.”

But other PSC members expressed scepticism about spending staff time and energy on holding hearings or verifying Georgia Solar Utilities’ financial viability when the commission lacks jurisdiction. The commission will discuss how to proceed Tuesday.

State legislators have been reluctant to change the Territorial Rights Act, fearing they would open the door to electricity deregulation. Georgia Power successfully lobbied to sidetrack last year’s effort to allow homeowners to buy solar power from companies that shoulder the cost of installing solar panels on home roofs.

Legal right to the grid?

Green and his partner, then operating as solar development company Greenavations, had previously proposed developing the Putnam solar project for Georgia Power, but the company declined. Georgia Power officials said this was partly because the PSC had just ruled that the company didn’t need so much generating capacity.

But Georgia Power spokesman John Kraft said Monday that the Putnam project would also have put “$170 million of upward pressure on rates.”

The Putnam County project was financed in such a way that Georgia Power would have owned the solar array, but Georgia Power currently believes it can provide solar power better by bidding out 20-year power purchase agreements to solar developers who own the solar arrays, Kraft said.

Green argues Georgia Power doesn’t have the legal right to control access to the grid that Georgia rate payers funded.

“That’s the claim AT&T made when MCI sued” under anti-trust laws, eventually breaking up AT&T into smaller companies, Green said, adding, “I hope we don’t have to go there.”

Attorney Greene, on the other hand, says Georgia Power shareholders paid for the grid through debt and equity.

Georgia Solar Utilities proposes to pay Georgia Power for use of the grid, but it would also depend on Georgia Power for backup power for customers during times when solar is not available and would rely on Georgia Power for customer service and billing. There is no mention of reimbursing Georgia Power for these services.

In its reply to Georgia Solar Utilities’ proposal, Georgia Power argues that Georgia Solar “can’t be a ‘mirror image’ without the same responsibilities.”

“Creating a business model that knowingly requires another utility to involuntarily shoulder the significant shortcomings of its plan flies directly in the face of the fundamental requirement of a public utility to ensure adequate service,” Georgia Power states in its reply.

Shortly after Georgia Solar Utilities submitted its proposal to the PSC, Georgia Power presented a large new solar proposal of its own: replacing 210 megawatts of biomass energy projects that had fallen through with an equal amount of new solar capacity. It would be the largest voluntary solar program in the South, or in any state without a renewable energy requirement, Greene said.

The projects would go online over three years starting in 2013 but would involve 20-year power purchase contracts. They would include a portion of utility-scale solar farms -- which Greene invited Georgia Solar to bid on -- and a portion of small-to medium-sized projects that could include homeowners or businesses that install solar panels on their roofs, Kraft said.

McDonald pointed out that Georgia Power’s 20-year contracts lock in a rate that is likely to be higher than the market rate as solar technology improves. The PSC will also likely discuss this solar proposal Tuesday.

Solar developers who bid on the utility-scale projects could charge no more than 12 cents per kilowatt-hour. Georgia Power officials argue that this is less than what Georgia Solar Utilities proposes to charge, but Green said an apples-to-apples comparison would reveal that Georgia Solar’s rate was lower.

Solar advocates have been unusually silent about the Georgia Solar proposal.

The Georgia Solar Energy Association and the Southern Alliance for Clean Energy filed comments with the PSC commending Georgia Power for its solar plan, urging only a few tweaks in reporting and the PSC approval process.

Executive Director Jessica Moore said the Georgia Solar Energy Association is excited to see rising interest in solar expansion, but offered no specific comments on the Georgia Solar Utilities proposal. Amelia Shenstone with the alliance said the group is not willing to comment on it either.

But JaLynn Hudnall, executive director of the Heart of Georgia Energy Coalition, said the Georgia Solar Utilities proposal to create its own monopoly is not what’s best for Georgia residents because true competition drives down prices.

Hudnall praised both Georgia Solar and Georgia Power for putting more “skin in the game” but said, “We want to see more choice and more competition where the homeowner/business owner is the ultimate decision maker.”

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