Georgia Power abandoning Plant Mitchell biomass project

Recent analysis deemed project at Southwest Georgia plant not cost effective

ALBANY — Georgia Power has announced that it plans to file a request with the Georgia Public Service Commission (PSC) to decertify Unit 3 at Plant Mitchell in southern Dougherty County, and that the company is also cancelling the previously proposed conversion of the coal-fired unit to biomass.

Officials said in a news release the decision was made after extensive review and analysis deemed the conversion would not be cost effective for its customers. If the request to decertify the 155 megawatt unit is approved, it will be retired by April 16, 2015 – the compliance date of the United States Environmental Protection Agency’s Mercury and Air Toxics Standards Rule.

“We are continuously evaluating our generation mix to determine what sources provide the best long-term value for our customers,” said John Pemberton, senior vice president and senior production officer for Georgia Power. “Fuel diversity is key in providing clean, safe, reliable and affordable energy and we will continue to leverage natural gas, coal, nuclear and renewables, as well as energy efficiency programs, as part of our robust portfolio.”

Since proposing the conversion to biomass in 2008, officials say Georgia Power has worked to assess the project in light of new EPA regulations, as well as changing market and economic conditions, and that in addition to increased capital costs and costs related to environmental compliance, multiple other factors — such as the recent economic downturn and lower natural gas prices — have significantly reduced the project’s value and benefits for customers.

The company also considered switching the unit to Powder River Basin coal or natural gas, neither of which proved viable, officials said.

Georgia Power is in the midst of a significant transition to the company’s generation fleet. As part of its 2013 Integrated Resource Plan, the company received approval from the PSC to decertify and retire more than 2,000 megawatts of coal- and oil-fired generation at facilities across the state.

By 2017, officials at the company say, Georgia Power is expected to have more than 2,300 megawatts of generation from renewable sources in operation or under contract including hydro, biomass, landfill gas, solar and wind generation. The company recently added 250 megawatts of wind generation to its portfolio, and is expected to soon have nearly 800 megawatts of solar capacity under contract.

A representative from Plant Mitchell could not be reached for comment Friday.