Clean Power Plan Would Have Negative Impact On EMC Consumer Power Bills

TUCKER, Ga., Dec. 1, 2014 /PRNewswire/ -- Georgians who get their electric power from the 38 Electric Membership Corporations (EMCs) supplied by Oglethorpe Power Corporation would see their electric bills rise significantly between 2020 and 2034 under the Obama Administration's Clean Power Plan, according to comments filed today by Oglethorpe Power with the Environmental Protection Agency (EPA).

The American Coalition for Clean Coal Electricity (ACCCE), of which Oglethorpe Power is a member, recently published the results of a study performed by National Economic Research Associates (NERA) showing that the impact of delivered electricity prices to Georgia consumers would range between 12–13 percent.

Oglethorpe Power said certain scenarios in its preliminary analysis have yielded comparable results to the NERA study, and all of the scenarios analyzed showed cost increases for the corporation.  While the median compliance costs for a representative scenario were approximately $10 billion over a 15-year period (from 2020 – 2034), compliance costs to Oglethorpe's members could reach $20 billion under certain scenarios, particularly if renewable or energy efficiency measures are mandated.  Under certain scenarios, annual residential consumer bills could increase by $400 if this proposal is finalized.

Oglethorpe Power President and CEO Michael L. Smith called the estimated increases under the Obama Administration plan "outrageous" and said EMC consumers, many of whom live in depressed areas of the state, are the least able to afford the cost increases the plan would bring.

"This proposed plan is a complex disaster that will place a high cost burden on millions of Georgia residents for years to come while producing minimal positive impact on the environment," Smith said.  "We will continue to oppose the plan vigorously and strongly believe the EPA should discard it completely."

According to Smith, the plan unfairly targets Georgia, where the state's utilities already reduced carbon emissions 30 percent between 2005 and 2012, and would require reductions of an additional 44 percent, making Georgia the sixth most impacted state in the country.  He said many states that have not been as proactive as Georgia are required to do far less under the EPA proposal.

Another serious flaw in the Clean Power Plan is its treatment of new, under-construction nuclear facilities.  Oglethorpe Power and several co-owners are constructing 2,200 megawatts of new nuclear generation at the Alvin W. Vogtle nuclear plant near Waynesboro.  Yet the EPA plan includes the under-construction units in setting Georgia's performance standard as if they had already been completed and were in service.

"Despite the billions of dollars invested by the partners in the expansion at Plant Vogtle, the EPA plan effectively gives zero credit for these units toward meeting the future compliance requirements under the proposed regulation," Smith said. "This is inequitable and seriously misguided."

In addition, Smith said the plan's favoring of natural gas over coal plants will be expensive for all Georgians. Natural gas has historically had the most price volatility of any of the fuels used for power generation.  In addition, there has been limited availability of natural gas during periods of extreme cold like the Polar Vortex of 2014 and other severe weather events. 

"Georgia utilities have invested billions of dollars in coal-powered facilities that, under this plan, would have to be used less or, in some cases, possibly shut down before the end of their useful life" he said. "This would force us to replace coal-generated electricity with price volatile natural gas, reducing our ability to operate our plants in the most economical fashion and again leaving Georgia's consumers to pay the tab. Finally, the amounts of renewable and energy efficiency required to meet the goals in the plan are unrealistic and unachievable."

About Oglethorpe Power

Oglethorpe Power is one of the nation's largest power supply cooperatives with more than $9 billion in assets serving 38 Electric Membership Corporations which, collectively, provide electricity to more than 4.1 million Georgia residents. A proponent of conscientious energy, development and use, Oglethorpe balances reliable and affordable energy with environmental responsibility and has an outstanding record of regulatory compliance. Its diverse energy portfolio includes natural gas, hydroelectric, coal and nuclear-generating plants with a combined summer planning reserve capacity of approximately 7,800 megawatts, as well as purchased power. Oglethorpe was established in 1974 and is owned by its 38 Member Systems. It is headquartered in Tucker, Georgia.

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SOURCE Oglethorpe Power Corporation