Georgia Power, the biggest subsidiary of the Atlanta-based Southern Co., asked state utility regulators to approve those purchases as part of an updated plan to meet the electricity needs of its nearly 2.4 million customers starting in 2015. The plan does not publicly disclose how much money its customers would pay to upgrade plants, buy additional energy and cover other costs.
"The complete effect of a host of new federal environmental regulations is still being assessed, but Georgia Power's actions are a necessary and preliminary part of responding to the negative economic and reliability challenges created by new and proposed federal regulations," said a statement by Greg Roberts, Georgia Power's vice president of pricing and planning.
The elected members of the Public Service Commission, who regulate utilities, must decide whether to approve the plan within six months, PSC spokesman Bill Edge said. The commission has not yet set a schedule for its review. These plans are filed every three years.
State law permits Georgia Power to bill its customers for the cost of running its electricity system. Once state regulators decide whether to approve the utility's plan, Georgia Power will seek permission to alter its prices accordingly in mid-2013, Georgia Power spokeswoman Christy Ihrig said. The new rates would take affect starting in 2014.
Facing tighter pollution controls, Georgia Power is leaning toward converting some coal plants to natural gas, which burns cleaner and would not require as many regulations. The pending rules have the greatest impact on coal- and oil-fired plants.
Company officials said they must see a final version of multiple rules proposed by the U.S. Environmental Protection Agency before deciding the long-term fate of six of its power plants. Of those plants, Georgia Power said it now believes it can continue to use Plant Kraft in Savannah because it is capable of running on natural gas. The plant also burns coal and fuel oil.
Plant McIntosh Unit 1 near Rincon could be converted from burning coal to natural gas, the company said. Georgia Power had previously debated converting the plant's fuel to biomass, but it does not believe federal regulations for biomass plants will be completed in time to get the plant back online by 2015. The power company said it could also switch the fuel oil burned at Plant McManus Units 1 and 2 near Brunswick to meet stricter pollution rules.
As part of its plan, Georgia Power formally requested permission to retire two coal-burning generators at Plant Branch in Milledgeville, a move the power company first announced in March.