Can A New ‘Green’ Utility Break Into Georgia’s Power Market?

One of the biggest barriers to entry for renewables is dealing with utilities working to maintain control over energy distribution in their given region. These companies often feel threatened by emerging “green” utilities that produce and distribute energy that comes exclusively from renewable sources.

Enter Georgia Solar Utilities Inc, or GaSU. It has just presented a proposal to the Georgia Public Service Commission to begin a utility scale solar project that will allow it to sell clean, renewable energy directly to customers. The kicker? The company says it can deliver the electricity at a lower cost to customers than their would-be competitors.

The claim comes from the company’s energy deployment strategy. The plan is for GaSU to produce electricity from large-scale solar PV farms and then sell that to Georgia Power. The company would then use some of those profits to pay Georgia Power for access to the grid. Any additional profits left over would be offered as rebates to customers. GaSU plans on taking advantage of the Investment Tax Credit to be able to quickly and efficiently establish these large solar projects.

The supply for GaSU’s power will come from a proposed 90 MW facility, which would be three times as large as the Simon Solar Program, the state’s largest approved solar farm. The projected cost of the new farm is $320 million and is said to open up opportunity for “hundreds of jobs” during its construction.

But all this assumes it can get approval from the state to operate as a utility. But a major barrier is the 1973 Georgia Territorial Electric Service Act, which effectively gives the state’s largest utility, Georgia Power, a monopoly on utility services. Previous attempts at changing utility legislation have met strong opposition.

If the law was amended and GaSU was allowed to operate in Georgia, it could open up the state’s tremendous green energy potential. Georgia Power only just brought its first large solar farm online this July with a capacity of 1 MW, enough power for about 300 homes. Georgia Power has bought into three more large solar projects that promise to provide the company with 50 MW by 2015. While this would be a significant step up from the state’s current level of 18MW of solar production, it is still a tremendous under-utilization of a resource that could meet 31% of the state’s energy needs from rooftop solar alone. Currently, about 5% of Georgia’s total energy production comes from renewables.

If allowed to go forward, GaSU’s long term plans are to expand from 90 MW to over 2 GW, enough to provide power to between 330,000 and 670,000 American homes. In its proposal, GaSU stressed that it wanted the PSC to “recognize the value to ratepayers from their supplying solar power under an innovative business structure and to grant GaSU the right to undertake utility scale solar development in Georgia.”

Interestingly, GaSU’s motion may have already had an impact on Georgia Power’s policies. Last Wednesday, just days after GaSU’s proposal, Georgia Power announced that it would be taking steps to increase the state’s solar use. The Georgia Power Advanced Solar Initiative would be one of the largest voluntary steps to increase solar production by any independent utility. The plan is to expand Georgia Power’s current solar generation by 210 MW in three years. It’s an admirable step, but one that SEIA, the national solar trade association, says doesn’t go quite far enough. SEIA praised Georgia Power’s decision, but said that the state could do more to encourage solar growth across the state, including adding more support for small-scale distributed generation projects and, importantly, including policies that “allow for other solar providers to participate in the market.”