Electric lines in the ice and snow

Alabama’s Lessons From Texas

This article by our Chief Operating Officer, Daniel Tait, was originally published in Business Alabama.

What happened in Texas in February was a tragedy, with millions left without power amid freezing temperatures for days.  A recent opinion piece by Mr. George Clark of Manufacture Alabama discussed what a similar situation could mean for Alabama. While it’s true that better energy planning is needed, Mr. Clark missed the mark on the right solution for Alabama and left out key tools (cleaner and cheaper tools) to address Alabama’s energy needs.

As Mr. Clark noted, almost all energy sources had troubles in Texas, although not all suffered equally. Some government officials and other vested interests (mainly fossil fuel advocates) immediately jumped to conclusions, blaming the power outages on renewable energy sources, namely frozen wind turbines. It has since come to light that the main cause was actually frozen gas pipelines and instruments.  Gas and other fossil fuels like coal were especially hit hard with supply issues. Upwards of 40% of the Texas’s gas, coal, and nuclear fleet went offline at times. At its peak, about 30 gigawatts of mostly gas generation in Texas failed because of the cold temperatures. Wind power also had some outages, but not nearly on the same scale. In fact, ERCOT, Texas’ grid operator, reported that wind power was “the least significant factor” in the blackout. Furthermore, wind turbines can and do operate reliably in sub-zero temperatures if they are properly winterized, and wind turbines operate fine in much colder places, such as the northern Plains.

Texas relies heavily on gas for its energy supply, just like Alabama. Unfortunately, the recent disaster highlights the inherent risks associated with gas plants, gas supply, and an overreliance on gas. Many of the gas plants that went offline in Texas could not receive the gas they were promised, even if they had firm delivery gas contracts. And, as this goes to press, Alabama Power is currently proposing a massive expansion of their electric generation capacity with mostly gas. But gas, as we are seeing in Texas, is not the panacea many utilities claim it to be.

So, what can Alabama do to help protect us from a similar catastrophe? While we won’t know the full story until Texas authorities investigate further, Alabama can and should take immediate steps to prepare. While electricity outages are always a possibility, we can reduce the likelihood of occurrences and impacts by investing in more energy efficiency, having more robust demand response programs and reducing barriers to renewable energy in our state.  Alabama is woefully behind in deploying these lower cost resources that do not require the massive expenditures (and accompanying rate hikes) that a new gas plant requires.

As the least cost energy resource for customers, ramping up energy efficiency would lower bills for customers across the board. Energy efficiency is especially important to reduce peak stress on the grid in Southern states where much of our home heating comes from electricity–more efficient homes and businesses hold on to heating and cooling for longer periods and save energy and money year-round. But energy efficiency is also a public safety issue. If power goes out for a prolonged amount of time as it did in Texas, Alabama needs buildings that can keep people warm and safe. Unfortunately, Alabama Power ranks last in the nation in energy efficiency offerings among utilities. Utilities often oppose stringent energy efficiency standards and building codes in an attempt to sell more electricity and build more centralized power plants. While that may be good for utility profits, it’s not good for Alabamians or our businesses.

Furthermore, stronger and more robust demand response programs – which reduce or shift your energy usage – can help utilities manage load to keep the grid running when power plants go down and demand for electricity is still rising. Demand response programs can compensate residents for things like dialing back the temperature on their thermostat or shutting down a water heater during an emergency.

Finally, Alabama utilities and regulators have gone out of their way to block renewable energy sources in this state.  Look no further than the Alabama PSC’s recent decision, and Alabama Power’s increase in a “standby charge”, to keep taxing the sun for small scale solar producers in the state. Or the Alabama PSC’s recent decision to not allow 400 MW of solar plus battery storage. Smaller scale solar and energy storage projects can help us mitigate energy usage in record-breaking storms. These local sources of reliable and cost-effective energy are almost nowhere to be found in Alabama, even when compared to our Southeastern neighbors, and it’s critical to bring these sources online and scale them as quickly as possible. Neighboring states like Georgia are doing it, and they are creating jobs and stimulating the economy in the meantime. Utilities often oppose renewable energy resources, despite the myriad benefits for customers, because of the threat to their business model.

Preventing a disaster like Texas from happening in Alabama will require better planning and investing in lower cost resources such as energy efficiency, demand response, and renewable energy resources. Alabama should take heed of the tough lessons Texas learned: more gas plants are not a failsafe solution and banking on last century’s technology for a historic weather event can result in unprecedented failure.

Press Release: Tennessee Valley Authority Must Commit to 100% Clean Energy, Align With Biden Climate Goal

For Immediate Release, February 9, 2021

Contact:Gaby Sarri-Tobar, Center for Biological Diversity, (202) 594-7271, gsarritobar@biologicaldiversity.org
Daniel Tait, Energy Alabama, (256) 812-1431, dtait@alcse.org
Brianna Knisley, Appalachian Voices, (937) 725-0645, brianna@appvoices.org

Tennessee Valley Authority Must Commit to 100% Clean Energy, Align With Biden Climate Goal

KNOXVILLE, Tenn.— The federally owned Tennessee Valley Authority must align its energy planning with President Biden’s recent executive order requiring that the federal electricity sector completely decarbonize by 2035, energy justice groups said today in a letter to the public utility’s board of directors.

“TVA must change course immediately to address the climate emergency and meet President Biden’s urgent call to action,” said Gaby Sarri-Tobar, energy justice campaigner at the Center for Biological Diversity. “TVA’s electricity plans show no urgency to cut emissions, phase out poisonous fossil fuels, or diminish the unbearable energy burden felt by its customers, many of whom are Black and low-wealth. TVA board members are defying the president and worsening the climate crisis by failing to act.”

In advance of the board’s Feb. 11 meeting, the Center, Energy Alabama, Appalachian Voices and 10 other organizations demanded that the TVA board immediately commit to 100% clean and renewable energy by 2030.

“The TVA board has lost sight of its New Deal era roots and TVA’s prioritization of expensive and unnecessary coal and gas are threatening the very existence of the agency right when we need its bold action the most,” said Daniel Tait, chief operating officer of Energy Alabama. “TVA once led the country on clean energy development and earned its place as the nation’s iconic federal utility. It’s well past time for TVA to again set the federal example and get back to work for everyone in the Valley.”

TVA generates just 4% of electricity from solar, wind and energy efficiency. The utility plans to emit more than 34 million tons of carbon dioxide a year by 2038, according to its own projections. TVA is set to retire less than a quarter of its current coal fleet by 2030, and just this month announced plans to expand fossil fuel operations at two dirty gas plants.

“TVA should be modeling a rapid transition to zero carbon energy that also centers its union workforce. Instead, TVA continues to make expensive, dirty decisions, and now several local power companies are seeking a cheaper power provider, which may jeopardize jobs for our local unions,” said Brianna Knisley, Appalachian Voices’ Tennessee campaign coordinator. “Instead of making decisions that harm our environment and drive up energy costs, TVA should follow Biden’s executive orders and invest in clean and efficient projects that will bring energy equity and green job growth to the Valley.”

TVA’s actions jeopardize the utility’s long-term outlook as local power companies face rate spikes and diminished access to cheaper, cleaner energy. The Center recently intervened in a complaint filed by local power companies dissatisfied that TVA is blocking them from purchasing cheaper power from other suppliers. The companies are asking FERC to let them defect.

Last week Biden removed former President Trump’s nominations to the TVA board, so Biden will have four opportunities this spring to appoint clean-energy champions.

TVA is a federally owned corporation and the nation’s largest public power provider. It generates electricity for more than 9 million customers in Tennessee, northern Alabama, northeastern Mississippi, southwestern Kentucky, and portions of northern Georgia, western North Carolina and southwestern Virginia.

The Center for Biological Diversity is a national, nonprofit conservation organization with more than 1.7 million members and online activists dedicated to the protection of endangered species and wild places.

Energy Alabama is a membership-based nonprofit organization accelerating Alabama’s transition to sustainable energy. We accomplish our mission by educating at all levels, informing smart energy policy, building the next generation workforce, and providing technical assistance to deploy more sustainable energy. We believe in sustainable energy for all.

Appalachian Voices works at the nexus of the ongoing shift from fossil fuels to clean, 21st-century energy sources — we fight mountaintop-removal coal mining, fracked-gas pipelines and other harms to the people and places of Appalachia, and we advance energy efficiency, solar and wind power, and other economic solutions that create community wealth and sustain Appalachia’s mountains, forests and waters.

 

 

Energy Alabama, GASP Appeal Alabama PSC’s Approval of $1+ Billion Gas Expansion

Groups Appeal Alabama Public Service Commission’s Approval of $1+ Billion Gas Expansion 

For Immediate Release: January 11, 2021

Montgomery, AL—Energy Alabama, GASP, and the Southern Environmental Law Center are appealing the Public Service Commission’s approval of Alabama Power’s petition for its single largest capacity increase ever, with a price tag for customers of over $1.1 billion.

The groups have filed an appeal in state court challenging the Commission’s decision allowing Alabama Power to increase its natural gas capacity by over 1800 megawatts, including building a new gas plant at the Barry Electric Generating Plant in Mobile County, while failing to approve a proposal to add 400 megawatts of solar plus battery energy storage projects.

In September, the groups petitioned the Commission to reconsider its determination that this capacity increase is needed, especially in light of the economic slowdown caused by the pandemic; its decision to saddle customers instead of utility shareholders with the risk that the assets will become stranded; and its denial of the solar plus storage projects, which the utility’s own analysis showed had the most value for customers. The Commission denied the petition.

Starting January 1, Alabama Power’s electric rates are increasing for all 1.48 million residential, commercial, and industrial customers, raising the average residential monthly bill by about $4. As a result of the new natural gas capacity, bills are expected to increase further starting in 2023.

“Alabamians already pay some of the highest energy bills in the country and the pandemic has only worsened the financial hardships many are facing,” said Keith Johnston, Director of SELC’s Birmingham office. “Now the Commission is allowing Alabama Power to go forward with an unjustified, massive amount of new capacity that will further increase electricity rates, putting added strain on customers.”

The Alabama Attorney General’s office raised concerns in the Commission proceedings that the proposed gas plants could become stranded or uneconomic as a result of new emission standards or changes in technology, and recommended that the Commission impose a condition requiring that Alabama Power and its shareholders bear any stranded costs associated with its proposal instead of customers.

In its final order, the Commission ignored the Attorney General’s recommendation and failed to set any conditions on its approval, concluding it would be “inequitable” to burden Alabama Power shareholders with stranded asset risk, even though shareholders reap substantial profits from self-build assets like Barry Unit 8.

“The Commission failed to act in the public interest by approving unnecessary, expensive projects while leaving more affordable options on the table,” said Daniel Tait, Chief Operating Officer of Energy Alabama. “To make matters worse, the Commission has rubberstamped an enormous transfer of risk from utility shareholders to customers.”

Alabama remains the only state in the Southern Company territory, which includes Alabama, Georgia, and Mississippi, that prevents the public from any meaningful participation in the energy planning process.

“Alabamians deserve to have an open and transparent regulatory process, more information around how their energy decisions are being made, and the opportunity to provide input to ensure decisions are made in our state’s best interest,” said Michael Hansen, Executive Director of GASP. “When that transparency is missing from the energy decision-making process, we end up with unjust results where utility profits are given priority over people.”

 

Background:

In early March 2020 the Alabama Public Service Commission heard testimony from 15 witnesses concerning Alabama Power’s request to increase its total power-producing capabilities by almost 20%, despite the utility’s previous assertions that it wouldn’t need new electric generation sources until 2035.

On behalf of Energy Alabama and GASP, the Southern Environmental Law Center intervened in the docket to advocate for responsible, cost-effective investments to meet any need for additional capacity on Alabama Power’s system.

Energy Alabama and GASP’s experts exposed significant flaws in the planning and forecasting methods Alabama Power used to justify its claimed need. In written and oral testimony, the experts pointed to the utility’s long-standing efforts to profit from unnecessary and expensive new generation assets that increase costs for customers.

The groups also made the case that Alabama Power’s plan lacks significant detail about the cheapest, least cost resources, such as solar and energy efficiency.  Alabama Power’s own analysis showed that solar plus battery storage are the least cost resources in its proposal and provide more value to customers.

Energy Alabama and GASP’s proposed order details their position based on the record developed during the hearing.

The groups also filed a motion for permission to file supplemental briefing regarding how the Covid-19 pandemic may impact the need for and timing of the resources proposed in Alabama Power’s petition. These issues were not addressed during the March hearings, which was limited to testimony filed long before the pandemic took hold.

Energy Alabama and GASP filed a supplemental brief arguing that the Commission should not rush forward with a decision without fully assessing the pandemic’s impacts and resulting economic fallout on the utility’s petition.

Following the PSC staff’s recommendations to approve the majority of projects that Alabama Power is seeking to build, buy or contract, the Commission voted unanimously in June 2020 to adopt the staff recommendations in their entirety.

The only resources the Commission refused to approve were the proposals for solar plus battery storage, by far the most economic options according to Alabama Power’s own analysis.  Instead, the Commissioners signed off on the staff’s recommendation to evaluate the solar and battery proposals in another existing docket. The Commission issued a final order in August.

GASP and Energy Alabama filed a petition for reconsideration and rehearing in September, urging the Commission to reconsider Alabama Power’s need determination and to grant a rehearing to consider updated testimony in light of the changed circumstances resulting in lessened electric demand. The Commission denied the groups’ motion for reconsideration and rehearing in December.

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About Energy Alabama:

Energy Alabama is a membership-based non-profit organization accelerating Alabama’s transition to sustainable energy. We accomplish our mission by educating at all levels, informing smart energy policy, building the next generation workforce, and providing technical assistance to deploy more sustainable energy. We believe in sustainable energy for all. energyalabama.org

 

About GASP: GASP is a nonprofit health advocacy organization based in Birmingham, Ala. Our mission is to advance healthy air and environmental justice in the greater-Birmingham area through education, advocacy, and collaboration. We strive to reduce exposure to air pollution, educate the public on the health risks associated with poor air quality, and encourage community leaders to serve as role models by advocating for clean air and clean energy. GASPgroup.org

 

About Southern Environmental Law Center: For more than 30 years, the Southern Environmental Law Center has used the power of the law to champion the environment of the Southeast. With over 80 attorneys and nine offices across the region, SELC is widely recognized as the Southeast’s foremost environmental organization and regional leader. SELC works on a full range of environmental issues to protect our natural resources and the health and well-being of all the people in our region. www.SouthernEnvironment.org


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Energy Efficiency: Georgia Power vs. Alabama Power

You might think that there isn’t much difference between the utilities within each state’s borders (I know I didn’t). We give them money, and in return they make sure we have working electricity. Seems simple enough, right? How much more could there be?

As you may have guessed since this is an article and not a single paragraph, there’s a lot more to it than that. But, rather than compare every single utility within each state, we’ll focus on the differences between Georgia Power and Alabama Power which are both owned by Southern Company.

Specifically, we want to examine the differences in terms of how much money each company spent on energy efficiency compared to how much energy they are saving through those programs. But first, a little background information.

Each year, most utilities spend money that is supposed to go towards incentive programs that help customers save energy.¹ Most utilities channel a portion of the money that we pay them into energy efficiency programs, often being forced to do so by regulators because they don’t normally like selling less of their product. These programs exist to incentivize consumers to make upgrades on their homes and businesses, which is much cheaper than building a new power plant.

But not all utility energy efficiency is created equal and we have to take a look at the reality on the ground.

As of 2019, Georgia Power spent $16.5 million dollars, through various programs, on residential customers if they invested in cleaner energy efficiency for their homes. For commercial customers, Georgia Power spent $24.8 million dollars on energy efficiency. With that money, residential customers saved 95,124 megawatt hours (MWh), while commercial customers saved 295,968 MWh. That’s a total of 391,092 MWhs saved in 2019 alone! For comparison’s sake, the average Alabama home uses between 1 and 2 MWh per month.

Since Georgia Power and Alabama Power are owned by the same parent company, wouldn’t it make sense for Alabama Power to offer similar opportunities to their customers? Sadly, neither Alabama Power, nor Alabama regulators, seem to think so.

Unlike Georgia Power, Alabama Power only spent about $3.3 million dollars (of which just ~$5,000 were for incentives) on residential energy efficiency, and $84,000 for commercial customers. With that paltry sum, residential customers only saved 5,486 MWh and commercial customers just 192 MWh.

Why does Georgia Power spend so much more than Alabama Power? The price that consumers pay each company is fairly similar. So what’s going on here?

It comes down to monopoly control. Utilities do not want you to save energy, they want you to buy energy from them. It is the job of the regulators at the public service commission to protect consumers from monopoly abuses. Some regulators force utilities to invest in lower-cost energy efficiency since a monopoly would not do so on its own. Some regulators have even gone so far as to change the way utilities are paid in order to give the utilities a financial incentive to promote energy efficiency. Neither of those things happen in Alabama.

Part of it is that Alabama Power wants to build power plants, because they earn profit from how much new construction they do, regardless of if the construction is needed. In order to justify new construction, they need you to use more energy, not less. Don’t forget that Alabama Power customers are now on the hook for more than $1 billion in new gas plants…

I digress. The point is that we are giving utilities an arm and a leg, but we aren’t getting out what we put in. We’re already paying enough on our utilities bills to work towards the future and switch over to clean energy. Georgia, though they’ve just begun, has the right idea, and even they are behind the curve compared to many other areas of the country. So why is Alabama Power falling further behind? And why are we letting them get away with it?

Alabama PSC Should Release Analysis on Alabama Power’s Excessive Profit Formula

Today, Energy Alabama sent a letter to the Alabama Public Service Commission (PSC) asking it to commit fully to transparency and fairness by allowing regular Alabamians to review and submit questions about an overdue report examining Alabama Power’s Rate Stabilization and Equalization (RSE), a key factor in how the utility’s excessive profits are determined.

Read the letter here

Alabama Power’s RSE utilizes a formula that over-rewards the company at the expense of its customers. Hard-working Alabama Power customers deserve to know why they pay some of the highest electric bills in the country. The Alabama PSC owes an explanation to the people of Alabama and should find a way to virtually open this meeting to the general public.

There are major questions about the workings and results of the RSE formula which should be answered by a report required by a 2013 PSC order authorizing the rate. Publicly available data shows that Alabama customers are overburdened by the PSC’s formula, which hides the usual measure of return on equity (ROE) used by other utility regulators.

However, the “hidden” ROE can still be calculated from other sources. Such a comparison from 2014 through 2018 shows that Alabama Power customers paid more than $1 billion in excess profits than they would have if the PSC had instead awarded Alabama Power the national average ROE.

COVID-19, and the economic hardships it created, have further exacerbated the excess profit Alabama Power has pocketed. Instead, the PSC continues to over-reward Alabama Power at the expense of its customers.

Allowing a monopoly utility to retain profits that are far above those necessary to provide mandated services is not equitable nor economical for customers. The long overdue RSE report should provide the important information necessary for all stakeholders to discuss the unique formula and the profits it supports­­.

“If this Commission cares about creating jobs, it should put Alabama Power’s excessive profits back into the hands of regular folks and small businesses,” said Daniel Tait, Energy Alabama’s Chief Operating Officer. “The time for monopoly handouts is over.”

By any objective standard, the case is clear. The Alabama PSC must support transparency and #ReleaseTheRSE.