Georgia Power delay of biomass project fuels concern

The company, he said, “is taking an important step toward continued diversification of its fuel sources and making renewable energy more affordable for customers.”

The announcement caused a stir. Among environmental groups, Georgia Power was not regarded as especially green-friendly because of its reliance on coal, its measured take on the potential of cleaner, alternative fuels, and its support of nuclear development.

The plant conversion seemed to herald a new day. The project to build one of the largest biomass plants in the country was approved last March by the Georgia Public Service Commission.

So the news this month that Georgia Power was going to delay the conversion came as a blow to project supporters. The utility blamed “uncertainty” over future federal regulation of emissions of hazardous air pollutants from industrial boilers like the kind planned for Plant Mitchell.

“We are very disappointed,” said Stephen Smith, head of the Southern Alliance for Clean Energy. He questioned Georgia Power’s commitment to the project and said the company ought to proceed even in the event of tough federal emissions regulations.

“They got a lot of positive press on this,” he noted. “They either need to step up and show real leadership or acknowledge that they’re not really wanting to be a serious player.”

For now, Georgia Power said it will limit spending on the conversion to less costly engineering and permitting work while it awaits the U.S. Environmental Protection Agency’s release this April of a draft of the proposed regulations. A final ruling is expected in December.

Georgia Power executives said the plan was to begin converting Plant Mitchell in April 2011 and have it operational in June 2012. But to meet that schedule it would have to spend millions on conversion equipment early this year. Originally, that made sense because the company had expected the EPA regulations to be in place last summer.

“We didn’t feel it was prudent to spend several million dollars in early 2010 without having seen at least the draft rule . . .” said project manager Kenny Smith.

He said Georgia Power has spent less than $2 million so far towards plant conversion.

A spokesperson for the EPA said the agency had no comment on Georgia Power’s decision to delay.

David Ratcliffe, CEO of Southern Company, the parent of Georgia Power, said, “We want to move forward with this project,” but added, “We felt it was prudent to stand still,” pending new regulations.

He said he has told EPA officials that excessive regulation could thwart not only the conversion of Plant Mitchell, but that of other old coal plants as well.

The conversion should make economic sense, Kenny Smith said, because over time it will save the company money. Plant Mitchell is 45 years old and maintenance costs rise with its age. Also, the cost of coal has risen. Woody biomass is cheaper and readily available in the area near the plant, although the development of the touted bioenergy business in Georgia has been spotty.

“Converting it to burn woody biomass is going to produce more savings than keeping it running on coal,” Smith said. “That’s good for ratepayers.”

The plant has to be online by 2013 for Georgia Power to secure federal tax credits for renewable energy production.

Company executives said they plan to study the regulations when they come out to determine whether the design for Plant Mitchell’s makeover can meet emissions limits or whether it can be retrofitted in a cost-feasible way.

Georgia Power would need PSC permission to stop the project. The utility isn’t saying that’s in the plans, but it’s a concern of SACE’s Stephen Smith.

“I think they’re being overly cautious,” he said. “I would hope they would see it’s in their long term interest to develop projects like this even if it means working a little harder to make it happen. They’ll move mountains to build a nuclear plant. With a renewables plant, they hit a little speed bump and they seem willing to throw everything overboard.”

How we got the story

Georgia Power’s plan to convert a coal fired electric plant in Albany drew attention when the state’s Public Service Commission approved the project last March. Work continued on the conversion. Then, this month, the company announced a delay that will at least slow down what executives and observers said was an important development. The Journal-Constitution interviewed Georgia Power executives, environmental activists and government officials regarding the reasons for the delay, and the project’s future.