BEFORE THE STATE OF GEORGIA PUBLIC SERVICE COMMISSION Georgia Power Company’s 2019 Integrated ) Resource Plan and Application for ) Certification of Capacity from Plant Scherer ) Unit 3 and Plant Goat Rock Units 9-12 and ) Application for Decertification of Plant ) Hammond Units 1-4, Plant McIntosh Unit 1, ) Plant Estatoah Unit 1, Plant Langdale Units ) 5-6, and Plant Riverview Units 1-2, ) ) And ) ) Georgia Power Company’s Application ) for the Certification, Decertification, and ) Amended Demand Side Management Plan. ) Docket No. 42310 Docket No. 42311 POST-HEARING BRIEF OF THE SIERRA CLUB INTRODUCTION The testimony and evidence presented to the Commission over the course of these proceedings point squarely towards three key conclusions: [1] that the Commission should direct Georgia Power to significantly expand its procurement of renewable resources, [2] that the Company should retire Plant Bowen, and [3] that the Company should, in future Integrated Resource Plan (“IRP”) dockets, employ resource dispatch modeling that analyzes all resource types head-to-head. While the proposed stipulation recently arrived at by the Company and the PSC Staff does include some improvements over the Company’s initial filing, for the reasons explained in more detail below, that stipulation does not go far enough to ensure that the Company’s IRP is in the public interest by expanding renewable resources, transitioning the Company away from costly fossil-fired power, and improving the Company’s planning process. ARGUMENT Legal Standard The Rules of the Public Service Commission require that an integrated resource plan be “in the public interest,” and, if it is not, that the Commission reject the utility’s resource plan or provide an alternate plan. See Commission Rule 515-3-4-.01(2); 515-3-4-.06. An IRP that fails to be in the public interest thus should not be approved by this Commission. A. Georgia Power’s Renewables Target Should Be Increased. Although the proposed stipulation contemplates an increase to 1.65 GW of renewables from the single gigawatt that Georgia Power proposed in its initial filing, this number falls significantly short of what the entirety of the evidence submitted in this proceeding indicates is in the public interest. Sierra Club submitted the testimony of Rachel Wilson of Synapse Energy Economics, who undertook resource dispatch modeling using the EnCompass model to test the assumptions Georgia Power made in its own analysis. Wilson’s modeling—despite employing many of the Company’s own inputs—differed from that of the Company in that it allowed the model to select renewable resources; as a result, Wilson’s modeling showed that a portfolio strategy that added over thirteen gigawatts of solar capacity was in fact significantly cheaper than the Company’s own strategy. See Testimony of Rachel Wilson at 9:1-17; id. at 9:20 (“The Synapse analysis uses many of the same assumptions used by Georgia Power”); id. at 20:25-27 (“The Company can economically add another 13 GW of solar beyond what it has proposed”). Figure 1, below, demonstrates the changes in Georgia Power’s system capacity that Wilson’s modeling indicates would save customers money as compared with the Company’s proposal. Figure 1: Annual capacity under the Synapse Optimization portfolio1 Capacity (MW) 35,000 30,000 Battery 25,000 Solar + Battery 20,000 Dist. Solar 15,000 Utility Solar Hydro 10,000 NG - Other NG - CC 5,000 Nuclear Coal 0 Other intervenors likewise demonstrated that adding significantly more renewables to Georgia Power’s system beyond what was proposed in the Company’s initial filing (or is contemplated in the proposed stipulation) would result in lower costs for Georgia Power’s customers. For example, Southern Alliance for Clean Energy (“SACE”) submitted testimony showing that at least 3 GW and as many as 4.8 GW should be procured by the Company. See Testimony of John D. Wilson and Bryan A. Jacob at 4:15-16. Similarly, Georgia Large Scale Solar Association (“GLSSA”)’s testimony indicated that the Company’s proposed Customer Renewable Supply Procurement (“CRSP”) program should be expanded to 3.5 GW. See Testimony of John Sterling, Lynnae Willette, and Johan Vanhee at 35:18-19. Indeed, GLSSA’s testimony showed that the Company could expand the procurement to between 4 and 4.5 GW “while still providing net benefits to its customers.” Testimony of Arne Olson at 63:1-3. Other 1 Testimony of Rachel Wilson at 15. intervenors provided additional support for larger commitments to renewable energy. See, e.g., Georgia Center for Energy Solutions Testimony of Peter J. Hubbard at 17:378-391 (“the Company should commit to triple the amount of utility scale solar capacity, community solar capacity, and distributed rooftop residential and commercial solar capacity, committing to add 3,000 MW by 2022 (up from 1,000 MW in this IRP)”); Georgia Solar Energy Association, Inc. and the Georgia Solar Energy Industries Association, Inc. Testimony of Casey M. Busch et. al at 10:3-5 (“[Utility scale] solar generates cheap electricity, and it exerts downward pressure on rates paid by all Georgia ratepayers. Continued deployment of [utility scale] solar PV generation should be encouraged.”); see also Commercial Group Testimony of at 8:4 (“The Commercial Group supports making the program as large as possible.”) In face of this, the Company admitted that its initial 1 GW proposal was not based on any particular modeling or economics analysis, but instead was a number that merely felt right to Georgia Power; in its attempt to rebut the evidence introduced by intervenors demonstrating the benefits of larger commitments to renewables, the Company merely expressed similar qualitative, but not quantitative, discomfort with a total system-wide capacity of 5 GW. The Commission cannot allow the Company to continue to ignore the record evidence in favor of such hunches (which the Company likes to call its “disciplined approach”) because accepting that guesswork smoke and mirrors approach to decision-making is incompatible with the public interest. Indeed, the Company at no point in its rebuttal testimony at all addressed Wilson’s EnCompass modeling showing that an additional 13 GW of renewables should be added to the Georgia Power system; nor did the Company address public testimony by the cities of Athens and Atlanta expressing their interest in renewables to meet clean energy commitments the cities had made. See Testimony of Rachel Wilson at 19:6-18 (citing the high demand for solar in Georgia “particularly from both cities and large customers,” such as the unanimous passage by the Atlanta City Council of a resolution “calling for 100 percent clean energy with a target date of 2035,” and similar resolutions from Clarkston, Augusta, and Athens). As such, the Company has at no point established that either the 1 GW commitment in its initial filing or the 1.65 GW commitment contemplated in the proposed stipulation protects the interests of ratepayers. Above and beyond the value of renewables as a means of keeping electricity rates in Georgia low, solar energy also confers enormous benefits in the public interest. As Rachel Wilson noted in her testimony: Solar additions can be both scalable and rapidly implemented, providing resources to the Georgia Power system against contingencies such as potential additional delays in the Vogtle expansion […] solar installations can provide grid resiliency benefits, particularly in rural areas. Solar can also provide stable revenues for rural areas, and can help support tax bases in underserved communities. Id. at 19:23-20:6. We also note that there are many solar benefits that are not revealed by the modeling efforts. Rural community power access, cost and reliability, enhancements to grid resiliency, and ability to scale rapidly make solar a critical resource for the Georgia Power system; the relatively meager commitments in the Company’s initial filing and the proposed stipulation are accordingly inadequate to serve the public interest. Instead, the Commission should direct the Company to increase these commitments to at least 3 GW in the short term. B. Committing to Retiring Plant Bowen Now Saves Ratepayer Money. Sierra Club agrees with both the Company and the Commission Staff that the McIntosh and Hammond coal-fired units should be retired. However, as demonstrated by the modeling analysis performed by Rachel Wilson and described in her testimony, the four coal units at Plant Bowen should also be retired, with the Units 1 and 2 retired no later than 2023. To the extent there are transmission issues associated with that closure, Sierra Club would support those efforts and further notes that the costs would likely be recoverable in a rate case. One of the most significant capital costs facing all of Georgia Power’s coal-fired power plants consists of the wastewater treatment and other pollution controls necessary to comply with the federal Effluent Limitations Guidelines (“ELGs”). Particularly for plants that are at best economically marginal, like Plant Bowen (for which the Company is already agreeing to engage in a capacity procurement process to ensure it has resources to replace), the Company and this Commission have an opportunity right now to save significant ratepayer funds by making a decision to retire the plant before compliance with the ELGs is required in December of 2023 (at the latest). In other words, by determining in this IRP that the ELG compliance pathway for Plant Bowen is to cease burning coal, ratepayers would not be on the hook for any amount of spending in anticipation of the plant operating beyond the ELG compliance deadline. Absent such a determination now, funds are likely to be expended on plans to keep Bowen operating past 2023, which both diverts resources from the necessary transition planning and represents a sunk and stranded cost. While the proposed stipulation does contemplate capital spending caps of $19 million per year for Bowen Units 1 and 2, the relatively high level of those caps continues to burden ratepayers with a high level of risk. Even if the Commission declines to require in this IRP that they be retired by the end of 2023, the caps should be lowered in line with the spending caps placed on Hammond and McIntosh in the 2016 IRP; similarly, the Commission should indicate on the front end in any order resolving this IRP that exceedances of the caps are not recoverable from ratepayers. This will help provide clarity to the Company, and aid in ensuring that ratepayer funds are used in a responsible manner. Additionally, Sierra Club agrees with Southern Alliance for Clean Energy (“SACE”) that Plant Wansley would be beneficially retired, and as a result a capacity procurement should be conducted to seek resources to replace Plant Wansley, with an eye to avoiding the potentially hundreds of millions of dollars in ELG compliance costs at the Plant. C. In Future IRPs, Georgia Power Should Employ Resource Modeling that Examines All Resource Types. Georgia Power’s reliance on Strategist for resource dispatch modeling, along with its election to limit what the model can select to just new gas-fired generation, is inimical to the public interest because it skews resource planning in the direction of thermal and particularly fossil-fired resources, to the detriment of Georgia Power’s customers. Instead, Georgia Power should, in future IRPs, employ resource dispatch modeling that compares all resource types head-to-head and makes retirement and resource addition decisions accordingly. The EnCompass modeling conducted by Rachel Wilson was precisely so able to compare existing resources against a wide range of potential resource types and to consider such resources as ways to address changes in system demand over time. Specifically, in Wilson’s modeling analysis, “four generic renewable energy project options were offered to EnCompass as capacity expansion resources in addition to traditional thermal resources. They include onshore wind, utility-scale battery, utility-scale single-axis tracking solar PV, and a paired utility-scale battery and solar project.” Testimony of Rachel Wilson at 10:11-15. As a result, the EnCompass modeling ended up selecting 13 GW more solar than the Company was proposing in its initial filing. By contrast, Georgia Power’s preferred Strategist-reliant modeling approach was constrained in only looking at fossil resources. As Rachel Wilson testified, Georgia Power’s modeling “is outdated and does not reflect the changes that have occurred in the electric sector in the last decade with respect to cost and performance of renewable resources.” Testimony of Rachel Wilson at 3:2-4. This approach suffers from at least two major flaws. First, because Georgia Power’s model was unable to make retirement decisions, and instead relied on a unit retirement study that compared existing units in the abstract against a hypothetical gas-fired unit on the front end, the model was not able to make determinations as to whether or not it would be a better use of ratepayer funds to acquire renewable resources to replace existing fossil resources. Second, and relatedly, because Georgia Power’s Strategist modeling analysis did not allow any unmet resource needs to be filled by renewable resources, it again constrained the universe of possibilities the Company examined. Put another way, if Georgia Power used a model that was able to select renewable resources—as Wilson did—the analysis would recommend acquiring very large quantities of such low-cost and clean resources—as Wilson’s modeling did. As a result, Georgia Power should move to a new capacity optimization model for its 2022 IRP, and use one with chronological and hourly or subhourly dispatch similar to EnCompass that is freed to select a wide range of resources including renewables and battery storage. Georgia Power should not continue to reuse an outdated Strategist-based modeling approach.2 CONCLUSION For the foregoing reasons, to satisfy the public interest, the Commission should direct Georgia Power to expand its portfolio of renewable resources, transition away from costly fossilfired power, and improve its planning process, consistent with the discussion above. As noted in Rachel Wilson’s testimony, Strategist “is no longer well-suited for existing conditions in the electric sector,” id. at 3:22-23, because, among other reasons, it employs a simplistic approach to modeling intermittent resources, does not do hourly dispatch, and is unable to effectively model resources like battery storage. Id. at 4. This is part of the reason why Strategist’s vendor is phasing it out. Id. 2 Respectfully submitted this 24th day of June 2019. ______________________________ Robert Jackson, Esq. Robert B. Jackson, IV, LLC 260 Peachtree Street – Suite 2200 Atlanta, Georgia 30303 (404) 313-2039 rbj4law@gmail.com Zachary M. Fabish, Esq. The Sierra Club 50 F Street NW, 8th Floor Washington, D.C. 20001 (202) 675-7917 zachary.fabish@sierraclub.org BEFORE THE STATE OF GEORGIA PUBLIC SERVICE COMMISSION Georgia Power Company’s 2019 Integrated ) Resource Plan and Application for ) Certification of Capacity from Plant Scherer ) Unit 3 and Plant Goat Rock Units 9-12 and ) Application for Decertification of Plant ) Hammond Units 1-4, Plant McIntosh Unit 1, ) Plant Estatoah Unit 1, Plant Langdale Units ) 5-6, and Plant Riverview Units 1-2, ) ) And ) ) Georgia Power Company’s Application ) for the Certification, Decertification, and ) Amended Demand Side Management Plan. ) Docket No. 42310 Docket No. 42311 CERTIFICATE OF SERVICE I hereby certify that I have this 24th day of June 2019, served the following parties with the foregoing POST-HEARING BRIEF OF THE SIERRA CLUB, via email and or US mail as follows: Reece McAlister Executive Secretary Georgia Public Service Comm. 244 Washington Street, SW Atlanta, GA 30334 reecem@psc.state.ga.us Jeffrey Stair, Staff Attorney Georgia Public Service Commission 244 Washington Street, SW Atlanta, GA 30334 jeffreys@psc.state.ga.us G. L. Bowen, III Charles B. Jones, III Georgia Association of Manufacturers The Hurt Building 50 Hurt Plaza, Suite 985 Atlanta, Georgia 30303 rbowen@gamfg.org cjones@gamfg.org Kyle Leach Director, Regulatory Affairs Georgia Power Company Bin 10230 241 Ralph McGill Boulevard, NE Atlanta, GA 30308-3374 kcleach@southernco.com Bryan Jacob Southern Alliance for Clean Energy 1455 Hampton Hill Drive Alpharetta, GA 30022 bryan@cleanenergy.org Randall D. Quintrell Randall D. Quintrell, P.C. 999 Peachtree St, N.E., 23rd Flr Atlanta, Georgia 30309-3996 randyquintrell@evershed-sutherland.com Kevin Greene, Esq. Troutman Sanders NationsBank Plaza 600 Peachtree Street, NE Suite 5200 Atlanta, GA 30308 kevin.greene@troutmansanders.com Robert B. Baker Robert B. Baker, P.C. 2480 Briarcliff Road, N.E. Suite 6 Atlanta, GA 30329 bobby@robertbbaker.com Jeffry Pollock J. Pollock Incorporated 12647 Olive Blvd., Suite 585 St. Louis, Missouri 63141 jcp@jpollockinc.com Liz Coyle Georgia Watch 55 Marietta Street, NW Suite 903 Atlanta, GA 30303 lcoyle@georgiawatch.org Berneta L. Haynes, JD Georgia Watch 55 Marietta Street, Suite 903 Atlanta, GA 30303 bhaynes@georgiawatch.org Bruce Bucat, Esq. Mid-Atlantic Renewable Energy Coalition 29N. State Street, Suite 300 Dover, DE 19901 bburcat@marec.us Simon Mahan Southern Renewable Energy Association 5120 Chessie Circle Haltom City, TX 76137 simon@southernwind.org Alan R. Jenkins Jenkins at Law, LLC 2265 Roswell Road, Suite 100 Marietta, GA 30062 aj@jenkinsatlaw.com Jeffrey Stair, Staff Attorney Georgia Public Service Commission 244 Washington Street, SW Atlanta, GA 30334 jeffrey@psc.state.ga.us Robert Jackson – Ga. Bar #387750 Robert B. Jackson, IV, LLC 260 Peachtree Street – Suite 2200 Atlanta, GA 30303 rbj4law@gmail.com Kasey Sturm – Ga. Bar #690615 GREENLAW c/o K.A. Sturm One Alliance Center 4th Floor 3500 Lenox Road Atlanta, GA 30326 kaseys@weissman.law Zachary M. Fabish, Esq. The Sierra Club 50 F Street NW, 8th Floor Washington, DC 20001 zachary.fabish@sierraclub.org Ben J. Stockton, PE, MBA Executive Director Concerned Ratepayers of Georgia 2305 Global Forum Blvd, Suite 912 Atlanta, GA 30340 encomanager13@gmail.com Steven C. Prenovitz, MBA Consultant Concerned Ratepayers of Georgia 4295 Amberglade Ct Norcross, GA 30092 scprenovitz@gmail.com Stephen E. O’Day Vickie C. Rusek Smith, Gambrell & Russell, LLP 1230 Peachtree Street NE, Suite 3100 Atlanta, GA 30309 soday@sgrlaw.com vrusek@sgrlaw.com Jim Clarkson Resource Supply Management 135 Emerald Lake Rd Columbia, SC 29209 jclarkson@rsmenergy.com Newton M. Galloway Terri M. Lyndall Steven L. Jones Galloway & Lyndall, LLP The Lewis Mills House 406 north Hill Street Griffin, GA 30223 ngalloway@gallyn-law.com tlyndall@gallyn-law.com sjones@gallyn-law.com Kurt Ebersbach Jullian Kysor Stacy Shelton Southern Environmental Law Center Ten 10th Street NW, Suite 1050 Atlanta, GA 30309 kebersbach@selcga.org jkysor@selcga.org sshelton@selcga.org Adrian L. Jackson Associate General Counsel Emory University Office of the General Counsel 201 Dowman Drive 101 Administrative Building Atlanta, GA 30322 adrian.jackson@emory.edu Peter Hubbard Georgia Center for Energy Solutions 55 Leslie Street, SE Atlanta, GA 30317 peter@georgia-ces.org William W. Maycock R. Danielle Burnette Smith, Gambrell & Russell, LLP 1230 Peachtree Street, N.E. Suite 3100, Promenade Atlanta, GA 30309 wmaycock@sgrlaw.com dburnette@sgrlaw.com William Bradley Carver, Sr. Esq. Hall Booth Smith, P.C. 191 Peachtree Street, NE – Suite 2900 Atlanta, GA 30303 bcarver@hallboothsmith.com Joe McDonough Managing Partner McFinney, LLC P.O. Box 20569 St. Simons Island, GA 31522 joe@captjoe.com SO CERTIFIED this 24th day of June 2019. ______________________________ Robert Jackson, Esq. Robert B. Jackson, IV, LLC 260 Peachtree Street – Suite 2200 Atlanta, Georgia 30303 (404) 313-2039 rbj4law@gmail.com