Georgia regulators consider pricey power plant to bolster forestry jobs

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State regulators are considering a plan that would allow Georgia Power to generate more electricity by burning organic material, such as wood pellets. 

There appears to be little disagreement over whether energy from biomass is a cheaper option than other energy sources: it’s not. Instead, questions around the proposal ultimately hinge on a different issue: whether it’s the role of the Georgia Public Service Commission to support jobs in the state’s timber industry. 

The last time Georgia Power made a long-term plan for generating energy was in 2022, when the PSC ordered the company to seek out more biomass, or electricity made from burning wood pellets, byproducts from the paper and timber industries, and other organic matter. The order said adding biomass would “support Georgia’s forest industry and rural job and economic development growth.”

Now, the bids are in. Georgia Power is seeking certification of three biomass projects—two at paper mills owned by International Paper and one new plant to be built by Altamaha Green Energy, LLC. 

But while Georgia Power says the new biomass would create jobs, even company officials acknowledge it’s not cheap. 

“Biomass is not the least expensive resource,” said Georgia Power director of utility planning Jeffrey Grubb at a hearing last month. “I think everyone knows that.”

An independent evaluator who analyzed the proposals for the PSC estimated that the largest biomass proposal, the Altamaha project, would cost three times the economic value of the energy. 

“It’s just bad economics. It is bad on the environment. It’s – I can’t say it any other way – it’s a freaking energy boondoggle,” said Treva Gear, the Georgia state manager for the Dogwood Alliance, an environmental group that opposes biomass.

Some consider biomass a renewable energy source because new trees get planted to replace the ones burned for energy. They argue those new trees offset the carbon emissions from burning the biomass. But critics like Gear contend that argument doesn’t add up because the new trees take years to grow, leaving a lag time between the emissions and the trees’ ability to absorb carbon dioxide.

“The trees that are mature are growing in the forest right now; they’re able to do more work and sequester more carbon than the baby trees,” said Gear. “The math just doesn’t work.”

But most of the discussion on the biomass proposals before the PSC focused on the economics, not the environmental calculus.

From a purely monetary perspective, biomass is rarely competitive with other sources of energy, according to Georgia Tech public policy professor and energy expert Marilyn Brown.

She conducted a study of recently-built biomass plants and found their energy is more expensive than making electricity with natural gas, solar or wind, or reducing demand with energy efficiency.

“It’s not been found to be cost competitive,” Brown said.

In the Virginia cases she studied, “they recognize that biomass was not gonna bring rates down. Biomass would bring rates up, and that’s what it would do in Georgia as well.”

Power rates aren’t currently part of the commission’s discussion; the PSC will set rates next year. But Georgia Power passes its costs on to customers via rates, and the company acknowledged in last month’s hearing that the new biomass would be a net negative for customers.

Those customers have seen their bills go up five times in the last three years, with another rate hike scheduled for January 1, 2025.

From the outset, though, the biomass proposals have dealt with more than just the cost of energy: the commission’s stated goal in ordering Georgia Power to seek out more biomass was to support the state’s forestry industry.

Commissioner Tim Echols made an impassioned case for that goal at Thursday’s hearing, citing the work a new biomass plant could create for people who haul or chip up timber.

“We represent everyone in the state, not just Georgia Power ratepayers,” Echols said. “We represent that truck driver…and that chipping crew.”

In response to criticism of the biomass plans and commissioners’ comments about supporting the forestry industry, Georgia Power’s lawyer emphasized that the company is pursuing this plan at the commission’s direction.

“Much of what you’re discussing…is absolutely appropriate for elected regulators to consider,” said lawyer Robert Highsmith on the economic development issue. “It is a policy question for this commission to consider.”

However, others questioned whether the Public Service Commission is responsible for bolstering an industry in the state. Commissioner Tricia Pridemore read aloud the PSC’s mission statement before questioning Highsmith on whether biomass is sufficiently reliable.

“The mission of the Georgia Public Service Commission is to exercise its authority and influence to ensure that consumers receive safe, reliable and reasonably priced telecommunications, electric and natural gas services from financially viable and technically competent companies.”

Several public commenters pointed to the commission’s stated purpose as well.

“Where in that mission does it say that you are supposed to concern yourself with business development and propping up the timber industry?” asked Miranda Kaplan, an East Atlanta Village resident.

The debate has focused mostly on the largest of the three biomass proposals, the deal with Altamaha Green Energy to construct a new biomass facility to generate up to 70 megawatts of electricity.

The other, smaller deals with International Paper would expand existing power generation facilities that burn waste and byproducts from paper mills to make electricity.

Brown called that smaller type of facility “the kind of biomass I like.”

“You’re now generating electricity from waste product and from waste heat,” she explained. “That is very, very, very competitive.” 

The Georgia Public Service Commission heard closing comments on the issue Thursday and will vote on Sept. 17.