PSC Gives Thumbs-Up For Alabama Power To Increase Fossil Fuel Use, Delays Solar Request

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Jimmy Emerson, Flickr

By Hank Black, BirminghamWatch

Alabama regulators voted today to give the go-ahead to Alabama Power Company’s request to add almost 2 million megawatts of energy from natural gas sources to its capacity to generate electricity.

The plan, proposed last year, would include a new 726-megawatt gas unit at its Plant Barry near Mobile.

The commission also voted to delay consideration of Alabama Power’s additional request to add 400 megawatts in solar-plus-storage generation to its inventory.

Combined, the requests are estimated to cost Alabama Power $1.1 billion, which ultimately would be paid by its customers.

The unanimous votes by the three-member Public Service Commission came after a series of public hearings and filings by groups for and against the plans. The PSC heard conflicting testimony from experts on both sides.

The power company said it needed to add power sources to keep a 26% reserve so it could guarantee meeting peak winter demands of its industrial and residential customers.

Alabama Power spokesman Michael Sznajderman noted that the PSC action is not yet final and said the company “will be reviewing the full order from the commission, when it is available.” No date was set for the final order to be entered.

The Southern Environmental Law Center, which represented Energy Alabama and Gasp in the hearing, said it is considering its options.

Alabama Power’s petition was endorsed by ManufactureAlabama, the Alabama Coal Association, the American Senior Alliance and Energy Fairness, a nonprofit policy group.

Paul Griffin, executive director of Energy Fairness, had this to say about the PSC decision: “With its approval yesterday, The Alabama Public Service Commission took a step in the right direction for all of those that rely on Alabama Power for reliable electric service. More low cost-natural gas is an important part of driving costs savings and reductions in greenhouse gas emissions and ensuring Alabamians have access to reliable and affordable power for many years to come.”

Those raising objection to the petition also included the Alabama Industrial Energy Association, an alliance of some of Alabama Power’s large industrial electricity users, such as ACIPCO and U.S. Steel, as well as the Alabama Solar Industry Association.

Daniel Tait of Energy Alabama accused the PSC of “a complete abdication” of responsibility. “They caved in to Alabama Power’s (request) despite the company’s own analysis that solar-plus-storage was the least-cost resource,” he said.

Tait, chief operating officer, said previously that the company’s solar-plus-storage projects “are saving customers money,” and the gas plants “are costing customers money.”

Michael Hansen, chief executive officer of Gasp, said that the PSC decision was “not at all surprising.” Hansen asserted that the commissioners, elected by statewide vote, have accepted campaign contributions in recent years of from $10,000 to $25,000 from fossil fuel companies. For detail see contributions to Chip Beeker, Twinkle Cavanaugh and Jeremy Oden.

Historically, the PSC has a strong relationship with the industry. In an April 30 analysis of Alabama Power’s parent company, the investment research firm Morningstar stated Southern Company’s regulatory environment is the strongest among its peers in the industry. The Chicago-based analysts stated that the company’s “best-in-class returns on equity are in large part because of the company’s constructive relationships with state regulators in Alabama, Georgia, and Mississippi.”

Southern Environmental Law Center staff attorney Christina Andreen Tidwell said, “Alabama Power has substantially overstated its need for these gas plants given glaring problems with its analysis. Its projected need is even less reliable now due to the pandemic and its economic impacts.”

The nonprofit groups, including the Sierra Club, sought permission from the PSC to update how the COVID-19 pandemic may impact the energy-producing resources proposed by the power company in its petition. Energy Alabama and Gasp argued in a brief filed last week that the commission should not vote without a full assessment of the pandemic’s economic fallout on the proposal.

The PSC actions on the power company petition followed staff recommendations. Once final, the ruling will allow Alabama Power to buy, build, or contract for:

  • Plant Barry Unit 8, a new 726-megawatt gas plant
  • Central Alabama, acquisition of an existing 915-megawatt gas plant
  • Hog Bayou, a power purchase agreement to buy electricity from an existing 238-megawatt gas plant
  • Demand-side management and distributed energy resources totaling 200 megawatts.

The last item relies on an energy efficiency program that would cut 200 megawatts from the company’s peak demand. In total, Alabama Power would increase its generating capacity by almost 20%.

The Sierra Club, the nation’s largest grassroots environmental organization, was among those that challenged the utility’s petition. Carol Adams-Davis of Sierra Club’s Mobile Bay group railed against the PSC vote today, particularly the new gas-fired unit planned for Plant Barry on the Mobile River in the ecologically sensitive Mobile-Tensaw Delta.

“We don’t want additional fossil fuels being burned near Mobile or anywhere else in the state,” she said. “We are going to continue to insist on the cost-savings offered by solar and energy storage, and we intend to keep challenging the dirty gas and coal that Alabama Power is burning at Plant Barry. Adams-Davis is a member of the executive committee of Sierra’s Alabama Chapter.

Stephen Stetson, senior representative for Sierra Club’s Beyond Coal Campaign, said, “It’s embarrassing and regrettable that the PSC severed the solar component while approving all of the expensive and polluting power plants.” He contrasted that action to Southern Company’s recent announcement that it intends to move to net-zero carbon emissions by 2050.

Photo: Jimmy Emerson, Flickr

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