Georgia’s EMCs See Higher Prices from Overreaching EPA Regulation
Thursday, September 8th, 2011
Low-cost and abundant coal fuels the generation of affordable electricity across the U.S., but new burdensome regulations from the U.S. Environmental Protection Agency will threaten the ability of electric cooperatives to provide reliable electricity to millions of Georgians, according to Paul Wood, president and chief executive officer of the Georgia Electric Membership Corporation (Georgia EMC).
“Our goal is to take advantage of all the technologies available to us, not just one or two. New regulations will make it much more costly to build and operate power plants in a cost-effective and efficient manner,” Wood said.
Georgia EMC is a statewide trade association that serves the state's 42 electric membership corporations, Oglethorpe Power Corp., Georgia Transmission Corp. and Georgia System Operations Corp. A not-for-profit 501 (C)(6), member-owned organization, the association enables Georgia's electric membership corporations to pool their resources for greater strength and efficiency on common issues.
At Oglethorpe Power, the generation cooperative that provides power to 39 cooperatives in Georgia, coal currently represents 44 percent of its energy, nuclear represents 41 percent, natural gas 11 percent and hydroelectric 4 percent. Oglethorpe Power’s member EMCs reached a peak demand of about 9,000 MW this summer, and EMCs estimate the need for an additional 2,500 to 3,000 MW over the next 10 years to meet projected demand growth.
Achieving an appropriate cost/benefit balance
The EPA’s move to regulate carbon dioxide emissions is part of an effort to reduce greenhouse gas emissions that are believed to contribute to global climate change. Its mandate to force power generators to switch to other less commercial fuel sources such as solar, wind or biofuels will significantly increase electricity costs.
While the burning of fossil fuels, such as coal, to generate electricity is a source of carbon dioxide emissions, many utilities have taken steps to lower emissions. According to Wood, Oglethorpe Power has already implemented and will continue to implement additional technologies, which will result in some of the lowest emissions in the nation.
“We want to be good stewards of the land and resources, and leave a healthy environment for our grandkids but these regulations do not provide benefits in proportion to the costs they will impose,” Wood explained.
Added costs show up on residential and commercial customer electric bills. Agribusiness customers would face higher costs to run irrigation equipment, processing plants, poultry houses and other operations.
“Poultry companies are already struggling with high feed costs. If you add higher power costs on top of that, it’s possible that U.S. companies could start losing out to global competition from countries like Brazil,” Wood explained.
“If we were to lose the poultry industry, it would be devastating to our economy, costing Georgia thousands of jobs. And there are other sectors of the ag economy as well that cannot afford cost increases in their energy bills.”
Georgia EMC encourages EMC consumers in Georgia to pay close attention to policies that impact electric bills and contact elected officials to express their opinions. That’s even more important given the speed with which the EPA has acted in recent years.
“The EPA is giving industry a matter of months to comply with some of their new regulations. I’ve heard from utilities in Georgia and other states that it is more cost-effective for them to shut down some coal plants rather than implement measures to meet new requirements,” Wood said.
Staying the course on nuclear power
With the events in Japan following the earthquake and tsunami earlier this year, many are rethinking the long-term role of nuclear power. Germany has taken the most extreme response by committing to end its nuclear power program by 2022.
Oglethorpe Power has a 30 percent investment in the new nuclear construction under way at Units 3 and 4 of Plant Vogtle near Waynesboro, Ga. Nuclear power is nothing new to the EMCs, as Oglethorpe Power has a 30 percent ownership stake in Units 1 and 2 at Plant Vogtle and a 30 percent ownership stake in Plant Hatch near Baxley, GA. While Southern Nuclear is responsible for the construction and operation of nuclear facilities, Oglethorpe Power is engaged on behalf of its member EMCs on a day-to-day basis to ensure the value for these investments is delivered.
“We feel good about our involvement in new nuclear development and believe it is a good long-term solution to our energy needs. It goes back to taking advantage of all the technologies available to us,” Wood said.
Wood is confident in the nuclear technologies in use in plants today, believing they are significantly more advanced than those used years ago in the construction of the first generation of U.S. nuclear plants. Older plants in the U.S. are continually updated with new technologies as they became available.
“If you think back to the car you drove in the ‘60s and compare it to the car you drive today, you realize how far the technology has advanced. The same is true of nuclear technologies,” he explained.
Increased nuclear regulations threaten to significantly slow the development of new nuclear construction in the U.S. That would eliminate another primary fuel source of power generation, leaving only natural gas, which has historically had more price volatility.
“Georgia’s EMCs are focused on delivering the lowest cost electricity possible to consumers. Right now, the EPA and its regulations are the primary issue we face in achieving our goal,” Wood said.
More information on the challenges our country faces regarding its energy policy is available at https://www.ourenergy.coop/. More information on Georgia EMC and electric co-ops in Georgia is available at www.georgiaemc.com.