Georgia Power won approval to close some of its dirtiest coal and oil power units Tuesday, but state utility regulators took steps to lessen the immediate impact on customer bills.
Georgia Power wants to close two coal-fired units at Plant Branch and an oil unit at Plant Mitchell. By law, the company is allowed to recoup money for materials and supplies that cannot be used once units are shut down.
The Georgia Public Service Commission told Georgia Power to calculate the value of unused parts and that the commission then will decide how long the utility can recoup that money from customers as part of basic electricity rates.
Georgia Power plans to close Plant Branch Unit 2 in October 2013 and Unit 1 in December of that year to help the utility comply with federal environmental rules. Plant Mitchell 4C, an oil unit, hasn't been operating since 2009 because of an equipment failure.
Environmental groups praised Georgia Power's steps but continued to call for the utility to get more of its electricity from natural gas and renewable fuels.
"The company’s continued use of coal in lieu of cleaner forms of electricity is costing ratepayers as coal becomes more and more expensive," the Sierra Club said in a statement.
Also Tuesday, the PSC approved three of Georgia Power's four proposed contracts to buy natural gas from other companies in 2015. The utility said the contracts are needed to ensure the company has a required 15 percent electricity reserve to prevent blackouts on peak days. Georgia Power, which is boosting the amount of power generated with natural gas, argues that the grid reliability could be jeopardized without them.
Georgia Power will be allowed to collect an additional fee of $2.30 per kilowatt each year -- starting in 2019 -- to offset the cost of buying more fuel. State law allows utilities to collect an additional amount for buying power through long-term contracts.
PSC Chairman Tim Echols suggested that regulators approve only two of the natural gas contracts, instead of three. Otherwise, customers could be paying as much as $200 million more for electricity that the utility doesn't need, he said.
Commissioner Stan Wise said the three contracts are prudent and fired back at Echols.
"I want to give them your home phone number on those hottest days of August and the air conditioners and the lights and the health and safety and the welfare of Georgians (is) at risk," he said.
