My Comments before Georgia’s Public Service Commission 5 Nov 2013

Thank you for the opportunity to speak before the Commission today.

I spent the last five years studying energy policy, leading to two career changes, and my pursuit of a PhD at Tech in Nuclear Engineering. What I thought was a challenging set of circumstances is much more complex–with significant consequences. Energy is a cornerstone of our economy. It’s use represents 80% of our GDP. If we are to grow our economy, increasing our access to energy carries the utmost importance. It should be our goal to reduce energy’s cost. While we do not have control over fuel costs, we do control how we use them and our policies to regulate their use.

We face a regulatory milieu focused on removing coal from our energy mix. Coal produces 40% of our electricity, creating12% of Georgia’s GDP. We face the harsh reality that one of our main economic drivers is at risk. Its loss impacts grid reliability.
One consequence of increased regulation is more expensive electricity. Regulatory compliance drove utilities toward economies of scale–building ever larger plants. Single coal generators range from vintage 1950’s 100 MW(e) to over 1,000 MW(e) today. This is the shift from local production to regional generation. Smaller dispatchable generators served a region without dependence on the interconnected transmission infrastructure. The Federal war on coal is taxing our grid’s resilience, by forcing these older/smaller generators into retirement. What was once a local problem now has regional implications.

We can replace these coal plants with natural gas, exposing us to another risk. Hurricane Sandy caused an extended loss of power to natural gas pumping stations preventing fuel delivery. Natural gas could not restore the electrical grid. Neither could nuclear because of regulatory restrictions. Recovery was further inhibited by the hurricane’s destruction of the interconnecting grid. Entire counties went without power for weeks, and millions of people suffered. Restoring power was a massive coordinated effort. Coal played a critical role. Keep in mind Sandy occurred before the regulatory shutdown of the old coal plants.

While the cost of electricity is important, the cost of not having electricity is more important. Policies that enhance the market share of unreliable renewable energy include the cost of electricity from renewables but not the cost of when they do not produce the power. Renewables rely heavily on massive grid interconnection to ensure grid stability. We see from the lessons of Germany, Denmark, and California that renewables are not suitable for the grid. These states raised their cost of electricity, to the point that Georgia is bringing in their businesses.

This Commission should consider the long-term impact of Federally forced change on our grid. We have a massive amount of capital in our existing facilities that we can choose to repurpose or destroy. Whatever is destroyed or left fallow must be replaced. Replacement is expensive.

We need to grow our economy. The best way to do this is with policy that reduces costs. We must ensure our electricity supply is diverse and reliable. No single generation source can meet our needs. Yes, even those dirty old coal plants are still valuable.

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