Green Energy Program RedesignGreen Energy Program RedesignWilson Mallard – Georgia Power Company

NARUC Staff Subcommittee on Accounting and Finance Fall MeetingOctober 13, 2008

Wilson Mallard – Georgia Power CompanyNARUC Staff Subcommittee on Accounting and Finance Fall Meeting

October 13, 2008

• Background and History

• Customer Needs

• Program Redesign

• New Green Energy Program Implementation

• Background and History

• Customer Needs

• Program Redesign

• New Green Energy Program Implementation

Green EnergyGreen Energy

BackgroundBackground

History of Green Energy at Georgia PowerHistory of Green Energy at Georgia Power

• Proposed by GPC in IRP in 2001

• Green Program approved in 2003

• Landfill Gas resource contract signed in 2005

• GPC purchases solar energy through the RNR tariff

• Customer Billing began in October 2006

• Green-e certification received in March of 2008

• Renewable Resource Action Plan (August 2007)

• Currently 90% subscribed – over 4,000 customers and 16,000 blocks sold

• Proposed by GPC in IRP in 2001

• Green Program approved in 2003

• Landfill Gas resource contract signed in 2005

• GPC purchases solar energy through the RNR tariff

• Customer Billing began in October 2006

• Green-e certification received in March of 2008

• Renewable Resource Action Plan (August 2007)

• Currently 90% subscribed – over 4,000 customers and 16,000 blocks sold

Customer

Needs

Customer

Needs

Georgia Power listened to all Stakeholders – Regulators, Customers, Environmental GroupsGeorgia Power listened to all Stakeholders – Regulators, Customers, Environmental Groups

• Large Customers need low cost Renewable Energy

• GPC filed Renewable Resource Action Plan (August 2007)

• First Stakeholder Meeting to review preliminary design (January 2008)

• Written Comments from Stakeholders (February 2008)

• GPC considered the Stakeholder comments and modified the proposed design

• Second Stakeholder meeting held in June 2008

• Large Customers need low cost Renewable Energy

• GPC filed Renewable Resource Action Plan (August 2007)

• First Stakeholder Meeting to review preliminary design (January 2008)

• Written Comments from Stakeholders (February 2008)

• GPC considered the Stakeholder comments and modified the proposed design

• Second Stakeholder meeting held in June 2008

• Satisfy Commercial and Industrial customer need for renewable energy at a competitive price

• Increase overall renewable energy purchases and production in Georgia

• “Green-e” certification

• Protect the viability of existing Green Energy Program

• Program designed to be financially self-sufficient

• Program must regulatory specifications

• Satisfy Commercial and Industrial customer need for renewable energy at a competitive price

• Increase overall renewable energy purchases and production in Georgia

• “Green-e” certification

• Protect the viability of existing Green Energy Program

• Program designed to be financially self-sufficient

• Program must regulatory specifications

Large Volume Renewable Energy Design RequirementsLarge Volume Renewable Energy Design Requirements

Redesign of the Green Energy Tariff

Redesign of the Green Energy Tariff

Green Energy Program RedesignGreen Energy Program Redesign

• The Green Energy Tariff was redesigned to provide several options for customers:

– Premium Green Energy - $4.50 per block, retains 2 % solar resource requirement

– Green Energy - $3.50 per block, no solar or wind resource requirement

– Large Volume Purchase Option – available on a customer specific basis after the customer has purchased 400 blocks of Green Energy

– Special Events Purchase Option – allows for one-time purchases of Green Energy for events such as concerts, sporting events, conventions, etc.

• The Green Energy Tariff was redesigned to provide several options for customers:

– Premium Green Energy - $4.50 per block, retains 2 % solar resource requirement

– Green Energy - $3.50 per block, no solar or wind resource requirement

– Large Volume Purchase Option – available on a customer specific basis after the customer has purchased 400 blocks of Green Energy

– Special Events Purchase Option – allows for one-time purchases of Green Energy for events such as concerts, sporting events, conventions, etc.

Green EnergyProgram RedesignGreen EnergyProgram Redesign

• Premium Green Energy - $4.50 per block, keeps 2 % solar resource requirement

– For customers who choose to pay more for solar resources

– 2 % solar resource will be supplied by purchases through RNR-3 (Renewable and Non-Renewable Resources)

– Existing customers can choose to select Premium Green Energy or stay on Green Energy

– Additional Premium Green Energy will be made available as more solar is acquired through RNR-3

• Premium Green Energy - $4.50 per block, keeps 2 % solar resource requirement

– For customers who choose to pay more for solar resources

– 2 % solar resource will be supplied by purchases through RNR-3 (Renewable and Non-Renewable Resources)

– Existing customers can choose to select Premium Green Energy or stay on Green Energy

– Additional Premium Green Energy will be made available as more solar is acquired through RNR-3

Green Energy Program RedesignGreen Energy Program Redesign

• Green Energy – lower price to $3.50 per block

– Supply from the Seminole landfill and other approved Georgia based renewable generators

– Solar/Wind resource will not be required– Large Volume customers required to purchase at least the

minimum number of Green Energy blocks before the Large Volume option becomes available

• Green Energy – lower price to $3.50 per block

– Supply from the Seminole landfill and other approved Georgia based renewable generators

– Solar/Wind resource will not be required– Large Volume customers required to purchase at least the

minimum number of Green Energy blocks before the Large Volume option becomes available

Green EnergyProgram RedesignGreen EnergyProgram Redesign

• Large Volume Purchase Option – Customer specific contract terms

– The demand initially will be met through purchases of Green-e certified Renewable Energy Credits (RECs)

– Customers must buy 400 blocks of the Green Energy tariff before they qualify to purchase Large Volume Green

– Batch procurement and contracting process will minimize costs and risk

• Large Volume Purchase Option – Customer specific contract terms

– The demand initially will be met through purchases of Green-e certified Renewable Energy Credits (RECs)

– Customers must buy 400 blocks of the Green Energy tariff before they qualify to purchase Large Volume Green

– Batch procurement and contracting process will minimize costs and risk

Large Volume Purchase OptionProcurement and Contracting Process Large Volume Purchase OptionProcurement and Contracting Process

1. Customers enroll (for the option to participate)2. Company secures supply and pricing3. Company notifies participants of offer, e.g.,

4. Customers make purchases (i.e., sign contracts)5. Company aggregates customer purchases6. Company purchases RECs, if necessary7. Company provides renewable energy benefits and bill to

customers

1. Customers enroll (for the option to participate)2. Company secures supply and pricing3. Company notifies participants of offer, e.g.,

4. Customers make purchases (i.e., sign contracts)5. Company aggregates customer purchases6. Company purchases RECs, if necessary7. Company provides renewable energy benefits and bill to

customers

Large Volume Renewable Energy Offer ( Sept. 1, 2008) Total Monthly kWhs Available: 10,000,000 Price: X ¢/kWh Minimum Monthly kWh Purchase: 50,000

3

Available while supplies last or until Sept. 30, 2009 , whichever comes first.

Contract Term years

Large Volume Purchase Option Procurement and Contracting ProcessLarge Volume Purchase Option Procurement and Contracting Process

RECMarket

RetailCustomers

Contract

1

4

RECContract

6

Bill

7

Georgia Power

Request forREC Quote

2

RECQuote

RECsNeeded

5

3

LVREOffer

Enrollment

2

GPC-Owned

Renewables

RECsNeeded

6

Renewable Energy Benefits

Green EnergyProgram RedesignGreen EnergyProgram Redesign

• Special Events Purchase Option

– Many customers are seeking Green Energy for special events

– One time purchase fits customer need– Customers will purchase energy through the approved

tariff– One year minimum on tariff requirement will be waived– Tariff applicability language will ensure only approved

special events qualify for the Special Events Purchase Option

• Special Events Purchase Option

– Many customers are seeking Green Energy for special events

– One time purchase fits customer need– Customers will purchase energy through the approved

tariff– One year minimum on tariff requirement will be waived– Tariff applicability language will ensure only approved

special events qualify for the Special Events Purchase Option

Green Energy Program RedesignSummaryGreen Energy Program RedesignSummary

• One program with several options• Goal to maintain Green-e certification• Program designed to break even• All fuel related expenses will be recovered through

the Fuel Cost Recovery Clause• All marketing and administrative expenses will be

covered by Green Energy Premiums• PSC will monitor the Program through quarterly

reports• If program is under recovered, premiums will be

raised; if revenues exceed expenses, additional resources will be procured or prices will be reduced

• One program with several options• Goal to maintain Green-e certification• Program designed to break even• All fuel related expenses will be recovered through

the Fuel Cost Recovery Clause• All marketing and administrative expenses will be

covered by Green Energy Premiums• PSC will monitor the Program through quarterly

reports• If program is under recovered, premiums will be

raised; if revenues exceed expenses, additional resources will be procured or prices will be reduced

What’s Next?What’s Next?

Green EnergyProgram ImplementationGreen EnergyProgram Implementation

• Contact all customers within 30 days– Customers must choose an option

• Produce brochures and sales kits– Marketing messages differ for each option

• Procure REC’s for Large Volume customers– From Company owned resources or REC market

• Update Billing System– Significant work needed to bill all options

• Update Accounting and Tracking– Expenses and revenues for each option must be tracked

• Design and produce updated quarterly reports– Public Service Commission oversight is essential

• Contact all customers within 30 days– Customers must choose an option

• Produce brochures and sales kits– Marketing messages differ for each option

• Procure REC’s for Large Volume customers– From Company owned resources or REC market

• Update Billing System– Significant work needed to bill all options

• Update Accounting and Tracking– Expenses and revenues for each option must be tracked

• Design and produce updated quarterly reports– Public Service Commission oversight is essential

Discussion and Comments

Discussion and Comments