The Alabama Public Service Commission heard testimony for more than three hours Wednesday about a petition submitted by Alabama Power seeking permission to offer up to 500 megawatts of renewable energy to its customers, either through new installations or purchase-power agreements with providers in other states.
The small-scale renewable energy projects would be up to 80 megawatts each, and could include new solar and wind energy projects, according to details of the proposal provided by Alabama Power.
According to Alabama Power, the proposal has specific customers in mind and would allow Alabama Power to serve those customers renewable energy at a premium price without increasing electricity costs for the rest of its rate-payers.
Noel Cain, Alabama Power’s regulatory policy manager, testified at the public hearing that Alabama Power had been contacted by multiple customers, including military installations and private businesses, that are seeking the option to purchase renewable electricity for their facilities, and that the petition would allow Alabama Power to meet those needs.
Cain said that the military facilities were under a mandate to generate up to 25 percent of their electricity from renewable sources by 2025. She noted that many Fortune 500 companies, including Google, Facebook, Amazon, Apple, Wal-Mart and others have similar internal mandates for renewable energy, and that offering renewable energy options would help to attract those kinds of businesses to the state.
She cited as an example the $600 million data center Google plans to build in Jackson County, Ala., which will be powered entirely by renewable energy.
The petition did not disclose details about individual projects, which would be negotiated between Alabama Power and the prospective customers. Cain said that the deals would be only be executed that would show an anticipated “positive economic benefit” to all Alabama Power customers and putting downward pressure on rates.
Cain said the proposal could also help Alabama Power and the state of Alabama comply with environmental regulations like the Environmental Protection Agency’s Clean Power Plan, which was finalized last week, although she referred to compliance as a “secondary benefit.”
The PSC is expected to include the petition on the agenda for its next meeting on Sept. 1.
“We’re hopeful that the commission will find this proposal beneficial,” Alabama Power spokesman Michael Sznajderman said after the meeting. “Obviously we brought it to them thinking it is (beneficial), meeting a growing interest among our customers for renewables.
“We believe this proposal gives us the flexibility to move quickly to meet some of the interest our customers have for renewables in a way that benefits not only them, but benefits our entire customer base.”
Time is a key factor, as a federal tax credit for renewable energy is set to expire after 2016. Projects not completed by then risk losing the tax credit if it is not reauthorized by Congress.
Sznajderman said that since the announcement was made about the petition, the company has received additional inquiries from customers interested in purchasing renewable energy and from those interested in installing the projects.
The plan was designed for commercial rather than residential power customers, but Cain testified that nothing in the proposal prohibited a community-scale solar project from being part of the project.
Cain testified and answered questions by representatives from the PSC, Alabama Power, the Alabama Attorney General’s office, and multiple private groups in Wednesday’s hearing.
“We’re really excited to see Alabama invest in renewable energy,” said Amelia Shenstone, organizing manager for the Southern Alliance for Clean Energy. “We know that that works in Alabama and we’re really excited for it to start happening here.”
The SACE was one of several groups sending representatives to the hearing to ask questions, including the Jobkeeper Alliance, the Alabama Environmental Council, and the Alabama Industrial Energy Consumers.
“We appreciate the chance to participate in these hearings, and would like to continue the conversation about how Alabama can approach smart investments in clean energy,” said Michael Churchman, executive director of the Alabama Environmental Council, which was represented at the hearing by the Southern Environmental Law Center.
“While many questions remain about the details of the proposal, it is clear that utilities are acknowledging the energy shift already underway and the cost-savings and benefits that come with renewables like solar and wind.”
“As evidenced by Google’s decision to expand into northern Alabama’s TVA territory, we are witnessing an increasing demand for clean energy options from business leaders,” said Keith Johnston from the Southern Environmental Law Center. “Our hope is that Alabama Power will take this opportunity and make renewable generation a more widely used and available resource, while also making sure those energy decisions benefit customers across the state.”
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