An Atlanta-based start-up is fighting to become Georgia's first regulated solar utility.
On Sept. 20, Georgia Solar Utilities Inc. (GaSU) filed a petition with the state's Public Service Commission (PSC), requesting the right to undertake utility-scale solar development.
The company's initial plans include deploying 2 GW of solar within the next four years, beginning with a 500 MW phase at seven locations. The first project would be an 80 MW array located in Putnam County.
GaSU’s decision to go it alone as a utility stemmed from the Putnam project, which the company originally proposed to Georgia Power, the state’s largest electricity provider, in April.
However, GaSU proposed that Georgia Power self-own the project rather than buy the output through a typical power purchase agreement (PPA). Georgia Power didn’t take the offer.
“They proposed a self-ownership project, and in our assessment, it didn’t look like it was going to be in the best interest of our customers,” says John Kraft, a spokesperson for Georgia Power. He says the project, as proposed, would have put upward pressure on ratepayers.
Robert Green, president of GaSU, insists the opposite is true. “With Georgia Power doing a self-ownership [model], it was in much better interest for ratepayers,” he says. “I got the money available, I got the land available - and then they declined.”
Now, GaSU plans to use the financial model from the Putnam project, remove Georgia Power ownership from the equation and create an individual utility company to bring solar to the Peach State.
GaSU will aim to create a rate-reduction fund and set up GaSU as a mutual company, which will take a fee to own and operate the solar farms. According to Green, the profits would be returned to ratepayers at the end of each year in the form of a dividend.
The company also plans to sell its output at retail prices rather than at wholesale rates.
“That’s the key to it,” says Green. “If you do that, you don’t need feed-in tariffs, you don’t want power purchase agreements and you don’t need the renewable energy credits.”
In order to gain access to the grid, GaSU would pay Georgia Power a wheeling fee, creating a new revenue stream for the power company, Green notes.
“We’re not looking for any free rides,” he says. “We’re not looking for anything but to sit in a competitive situation.”
Competition, indeed Less than a week after GaSU’s announcement, Georgia Power last Wednesday announced it was filing with the PSC a new, 210 MW solar initiative.
According to the utility, its Georgia Power Advanced Solar Initiative (GPASI) would “create the largest voluntarily developed solar portfolio from an investor-owned utility.”
“Voluntary is the key part,” says Kraft. “Some states have mandated renewable portfolio standards, and we don’t have that in Georgia.”
Through the GPASI, Georgia Power would acquire 210 MW of solar through 20-year PPAs within three years. The utility currently has 61.5 MW of solar under contract, and this proposed initiative would nearly quadruple the company’s solar portfolio.
However, Georgia Power’s overall generating capacity - i.e., all of its resources - totals 16.587 GW.
“We’re going to work hard to do what’s in the best interest of our customers to make sure we’re building out all of our resources,” Kraft says. “We have a diversified generation portfolio, with nuclear, natural gas, 21st century coal, renewable energy sources and even energy efficiency - all these things to meet our customers’ energy needs.
“We’re not going to put all of our eggs into one basket, because we know our customers are counting on both reliable power and affordable power,” he adds.
Tough decisions Georgia PSC Commissioner Lauren McDonald is pushing hard to bring solar power to the state. Citing advancements in technology and low interest rates, as well as Georgia’s open land and hot sun, he says now is the time.
“The cost of building solar farms today differs from what it was five years ago - or even two years ago. It’s much more attractive,” McDonald explains.
As a commissioner, McDonald has begun reviewing both Georgia Power’s and GaSU’s proposals.
“Georgia Power told me back in May that they were going to work on solar and some solar projects,” he says. “They basically told me, ‘Commissioner, we hear you, and we’re working on it.’ This is the plan that they laid out, and I respect them for it.”
Nonetheless, McDonald insists that Georgia needs more than what the power company has suggested in its proposal.
“A snapshot right now tells me that the ratepayer would benefit more directly with GaSU’s plan,” he says.
McDonald says the commission is examining both proposals closely, and no decisions have yet been made. “The PSC would not do anything that would require upward pressure on the ratepayer - I can tell you that,” he notes.
Roadblock A 1973 law could hinder GaSU’s plans. The Territorial Rights Act, as it stands, essentially gives Georgia Power the exclusive rights to utility-scale development.
McDonald, who served on the Georgia General Assembly when the law was passed, says the assembly would need to change the legislation in order for GaSU to follow through on its solar initiatives.
“The Territorial Rights Act has been good for Georgia and the consumer,” he says. “It has its place, but it needs to be looked at.”
GaSU’s Green thinks the legislation needs to catch up with the times.
“Adjusting a law to the onset of technology is reasonable,” he says. “It’s unreasonable and irresponsible to use a 1973 law, which never contemplated solar power, to quash technology that’s been proven to be in the best interest of ratepayers.”
Although it has a law with which to contend and awaits the PSC’s decision, GaSU plans to keep moving forward by getting the word out about the benefits of solar power and the company’s deployment goals.
“I think the promise of the project is getting through,” Green says. “There’s plenty of people who want to finance it.”
Photo courtesy of the National Renewable Energy Laboratory
