Monday, October 24, 2011

Georgia Utility Regulator Backs Solar Power Subsidy

A top utility regulator said Tuesday that he would support charging Georgia Power customers up to an extra nickel each month to build more solar energy projects and even debate whether Georgia should force the power company to buy more renewable energy -- a position that's been politically unpopular in the Southeast.

Public Service Commissioner Lauren "Bubba" McDonald, a Republican, surprised other members of the commission when he announced his political change of heart at a public hearing Tuesday. He previously called on Georgia Power, a subsidiary of the Atlanta-based Southern Co., to add another 50 megawatts of solar electricity in its portfolio. That is a relatively small amount. By comparison, it's equivalent to just over 2 percent of the electricity that would be produced from the new nuclear reactors the company hopes to build near Augusta.

"I'm just trying to stir the pot and get us looking outside the box," McDonald said in an interview where he described his proposal for a maximum 5 cent monthly solar charge. "That's a position that three years ago, I would have said, `No.'"

Under McDonald's proposal, the extra money collected to subsidize solar power would bridge the gap between what Georgia Power is willing to pay for the solar electricity that it distributes to its customers and the prices that solar developers say they need to make a reasonable profit. It is not clear his idea will find much support. PSC Commissioner Stan Wise, a Republican, said he hoped the plan was dead on arrival. Wise said he would oppose the proposal even if it was necessary for Georgia Power to follow through on McDonald's request that it add 50 megawatts of solar energy to its power system.

One megawatt is enough energy to power roughly 400 homes.

"If we start to feel like we need to sweeten the pot, we're not going there," Wise said. "I'm opposed."
Georgia Power spokeswoman Lynn Wallace said in a written statement that the company was willing to expand its use of solar power where it was cost effective. The company opposes any plans that would force it to buy renewable power, a concept commonly called a renewable portfolio standard.

"We are opposed to a renewable portfolio standard due to the fact that it imposes mandates on types of generation without regard to economics," Wallace said.

McDonald gave conflicting signals on whether he would support a law requiring Georgia Power to buy set quantities of renewable energy, a proposal that has repeatedly failed to win political support across the Southeast. Among the states in the region, only North Carolina has set such a rule for its power companies.
Advocates say such laws stimulate the demand for energy sources that are not dependent on fossil fuels and do not emit the gasses blamed for global warming. Detractors argue that the South lacks enough cheap renewable power to meet the requirements without hiking prices for customers. Political mandates have also been deeply unpopular in statehouses controlled by Republicans.

Some states outside Georgia also have laws forcing utilities or other firms to buy credits from renewable energy developers that are separate from the electricity they produce. In his prepared remarks, McDonald said that renewable energy developers in Georgia are at a disadvantage because they cannot sell their credits since no one is forced to buy them.

"That uncertainty creates underlying problems for financiers and businesses to invest in solar projects in Georgia," he said.

McDonald said the PSC should investigate how to create a market for those credits. He did not explain in detail how that would happen. The Republican said he was generally against forcing utilities to buy renewable energy because it would mean imposing a government mandate. He also acknowledged that his solar fee was a mandate on consumers.

"I'm willing to explore those states that have done this," McDonald said, speaking about states that require utilities to buy renewable energy. "I haven't got a totally closed mind."


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