Opinion: Georgia needs electric utility reform

State’s current energy model’s not well-suited for rapidly changing future.

We live in amazing times to experience the benefits of technology, not only with smartphones, computers and medicine, but especially for energy.

The number of advancements in how energy is produced and delivered and stored is mind-boggling. Things like data analytics, virtual power plants, grid edge services and distributed energy mean the electricity grid is able to decarbonize affordably and rapidly and it means people can be engaged in ways never before possible.

Yet none of that is seen in recent announcements from Georgia Power as reported in The Atlanta Journal-Constitution, in which the utility claims that large amounts of new capacity that only it can produce are required to meet a capacity crunch. Georgia Power is a monopoly utility that is guaranteed a healthy profit for building power plants, an antiquated business model that needs to change. Of course they will claim the need to build more capacity: that is how they make money.

Patty Durand

Credit: contributed

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Credit: contributed

Georgia Power keeps making energy forecasts that seem logical -- that a growing economy and population mean growing energy demand. But the record shows that not to be true. Advances in lighting, building and appliance efficiency are among the reasons why electricity sales remain flat in Georgia. In fact, according to data from the Energy Information Administration (EIA.gov), between 2007 and 2022, Georgia Power’s megawatt-hour sales showed no growth. During that timeframe, they gave state commissioners years upon years of future growth estimates that never materialized, but which were used to authorize building more capacity.

Thanks to Georgia’s five elected Public Service Commissioners, residential customers experienced a 67% increase in electric rates according to EIA.gov data, 26 points higher than the rate of inflation for those same 15 years.

Georgia Power again cries “capacity crunch,” but this summer Georgia Power’s “reserves” or unused generating capacity, were close to three times national guidelines set by the National Electric Reliability Corp. to ensure vital U.S. interests in electric stability are met. Such high reserves costs Georgians billions of dollars in unnecessary rate increases and deliver billions of dollars in excess profits to Georgia Power.

Plant Vogtle, the only nuclear plant under construction in the United States, and at $35 billion the most expensive power plant ever built on earth, handed Georgia Power a 20% profit for many years, even before generating one watt of electricity. With the performance record showing flat electric sales and chronic excess electric capacity, Vogtle’s primary function was clearly only to deliver more profits to Georgia Power.

The Georgia Public Service Commission’s mission is to balance the interests of Georgia citizens against Georgia Power’s profit motives. But where is that balance? Even knowing no growth was occurring and future capacity estimates were unreliable, commissioners authorized Plant Vogtle in 2009, and again in 2017. And they did so with no cost cap or customer protections in place.

Substantial prepayments in the form of a nuclear construction tariff on customers’ monthly bills added up to an extra $1,000 for each Georgia household and delivered $2.5 billion in profits, according to Georgia PSC calculations. Meanwhile, Georgia Power has fought off net metering, a policy adopted by more than 30 states to incentivize rooftop solar by compensating people the same rate for contributing energy to the grid that they pay for taking energy from the grid. The sunbelt state of Georgia is 43rd in state rankings for rooftop solar while we pay for extreme Vogtle profits.

It is time to move forward with changing how our utility profits, so as to better align with societal goals. Performance-based regulation compensates utilities for how they perform, rather than for building new capacity. This solution is already underway in more than 10 states, including North Carolina, where they’ve created utility performance incentives such as clean energy, storm resilience, affordability and consumer engagement.

In addition to aligning utility profits with performance goals, our state legislature must return the Consumer Utility Counsel (CUC), a department that operated out of Georgia’s Office of Consumer Affairs for decades and was designated to function as an independent consumer advocate at the Georgia PSC. The CUC was defunded in 2008, the year before Plant Vogtle began, and its loss cannot be overstated: there is no advocate negotiating on behalf of residential customers, while industrial and commercial customers, as well as Georgia Power, have dozens of lobbyists.

With the right price signals, electric vehicles in the coming EV boom can charge overnight and improve the extremely low 40% utilization rate of Georgia’s grid. New industrial and data center electricity needs can be met by changing the law to encourage businesses to put solar panels on their roofs, instead of charging Georgia Power customers to build more generation capacity.

These are exciting times in the energy transition. Things like heat pumps, electric water heaters, smart connected devices, rooftop solar and vehicle-to-grid EV battery storage are ways people can be engaged with local energy solutions. Community solar reduces bills for renters and ensures everyone benefits from the energy transition.

For these things to happen we must align utility profits with performance goals, as dozens of states have done. If we allow the widespread use of local technologies and create programs that engage people, we can have the affordable grid that Georgians deserve.

Patty Durand was president of the Smart Energy Consumer Collaborative from 2010 to 2020 and was a candidate for the Georgia Public Service Commission until the election was indefinitely postponed by a federal judge in October 2022.

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