The Georgia Department of Economic Development (GDEcD) recently announced that for the third year in a row the state broke records for economic development during Fiscal Year 2023 (FY23). In FY 23, total investments in facility expansions and new locations totaled more than $24 billion, resulting in 38,400 new jobs through 426 projects supported by GDEcD’s GlobalCommerce team.

When excluding the two largest projects in state history – Rivian and Hyundai Motor Group – from the previous year’s job creation figures, total jobs as a result of FY23 projects exceeded the previous record by more than 2,800 new positions. Annual investment totals have also increased by 131 percent over the last three years.

Eighty-two percent of new jobs created and more than $20 billion in investments are on their way to communities outside the 10-county Atlanta region. A magnet for industries like financial technology and life sciences, Metro Atlanta also continues to play a critical role in the state’s overall economy, attracting $3.6 billion in investment last fiscal year. Expansions account for 71 percent of total projects, and new locations for 65 percent of new jobs announced across the state.

Georgia has remained on the cutting-edge of the future of mobility. Between July of 2018 and July of 2023, at least 40 e-mobility projects have been announced, committing more than 30,000 jobs and over $25 billion in investment to the state. This past fiscal year, job creation in the automotive industry increased by 324 percent when compared to FY21, and suppliers attracted by Georgia’s mobility original equipment manufacturers (OEMs) resulted in over $2 billion in investment across the state in FY23. Mobility and cleantech projects alone delivered three investments of $1 billion or more and six of the largest projects by job creation– a result of fostering innovation in the state with the support of organizations like the Georgia Center of Innovation, which connects public and private partners in strategic ecosystems.

Furthermore, partnerships with community and state partners on speed-to-market and work force solutions like the “Georgia Ready for Accelerated Development” (GRAD) certification and Georgia Quick Start programs spurred a 112 percent growth in advanced manufacturing investments since FY21.

Georgia also benefits from a reliable logistics industry that extends throughout the state along a robust network of top-ranked highways and accessible railways. With ample cold storage space, key sectors like agriculture – the state’s number one industry – and food processing are able to safely transport products to local groceries and markets across the U.S. and abroad. Agribusiness-related job creation grew by 29 percent compared to FY21.

After a pilot testing program, MEAG Power will launch the new Participant Pages on its corporate website early in 2024, providing an array of useful information to Participants in a totally updated and graphically modern format, including numerous new features. The new Participant Pages will replace the existing Participant Portal.

The new Participant Pages, which will be accessible using proprietary login credentials, will feature navigation elements on a green background — as shown in the screen shot above. Publicly accessible information on the MEAG Power corporate site remains on the light blue background across the site (as indicated in the screen shot below, which shows both public and Participant navigation links).

Included in the new Participant Pages — under the Participants main navigation tab — are searchable, categorized Contacts for both MEAG Power staff and Participants, Power Supply data for both the MEAG Power system and individual Participants, a Documents section to access billing and related information, and a new Participant Toolkit that contains marketing-related resources available for Participant use. Also, under the Resources main navigation tab, are new Under the Domes and Legislative Guide pages, housing MEAG Power’s state legislative newsletters and our annual list of both state and federal legislator contacts produced for MEAG Power Participants and ECG members.

The new Participant Pages were built on the same platform MEAG Power implemented to build the new corporate website, launched in December 2020. We continue to utilize the framework of that robust platform to roll out additional website pages and functional tools such as the online registration and Event pages used for our annual events including the Annual Meeting and Mayors Summit, among others. In short, the corporate site was envisioned — and is being used as — the hub for all such public and Participant information and tools.

NOTE: After the pilot testing period, the new Participant Pages will be rolled out to all Participants in early 2024. Participants seeking login credentials for the new Participant Pages should contact your Regional Manager.

In November, MEAG Power held its 29th annual Mayors Summit, a forum where Participant Mayors and Board/Commission Chairs and their designees can share experiences, discuss the political, economic and industry environments, and build on the relationships that are the foundation of the MEAG Power family.

In addition to the traditional Open Discussion with Mayors, in which all attendees are invited to share their views on the most important issues of the day affecting Participant communities, a Mayors-only session allows Participant leaders to debate events amongst themselves.

The day-long general session featured speakers who provided an array of knowledge and insight to help Participant and MEAG Power leaders more deeply understand some of the most important issues of the day. Speakers delved into topics ranging from the state’s robust economic development to cybersecurity to a detailed debrief on how Georgia’s electricity market structure provides a significant advantage in providing a reliable and economical energy supply. Attendees also heard an update on the state’s political scene from Joel Wiggins, who will be assisting MEAG Power’s Government Relations staff during the upcoming legislative session.

The presentations from the Mayors Summit included:

The New Georgia Economy – Chris Clark, President & CEO, Georgia Chamber of Commerce

Georgia’s Energy Outlook – Kim Greene, President & CEO, Georgia Power

State Political Scene – Joel Wiggins, The Southern Group

Georgia’s Advantageous Electricity Market Structure – Dr. David Gattie, Associate Professor of Engineering, University of Georgia

MEAG Power greatly values the insight and input from Participant Mayors and Board/Commission Chairs in helping MEAG Power leadership and staff formulate the appropriate approaches to dealing with all the major issues of the day.

NOTE: The presentations are posted on a private Event Page on the MEAG Power website. If you would like to access the presentations and did not attend the event, please email us at events@meagpower.org to receive the URL. (If you attended Mayors Summit, please use the previously provided URL.)

Welcome to the Chateau Elan Winery & Resort!

This annual event is designed to focus on issues of relevance to — and gain input from — Participant Mayors and/or Board/Commission Chairs. If you are unable to attend, please ensure that you designate a person to represent your community.

MEAG Power relies on Mayors’ and Board/Commission Chairs’ voices in Washington, D.C., and at the State Capitol to ensure the future success of municipal electric systems in Georgia. A mix of MEAG Power business and operations updates, along with guest speakers and political analysis, highlight the program.

Meeting attire–Business Casual; Evening activities–Dressy Casual

In May, the American Public Power Association (APPA) recognized 109 of the nation’s more than 2,000 public power utilities as winners of the Reliable Public Power Provider (RP3) designation for providing reliable and safe electric service. Among those named was Marietta Power, at the Diamond Level.

A total of 271 public power utilities nationwide hold the RP3 designation, including five other MEAG Power Participants: (Diamond Level) City of Calhoun; (Platinum Level) Albany Utilities; (Gold Level) City of Cartersville Electric System, Fort Valley Utility Commission, Newnan Utilities.

The RP3 designation, which lasts for three years, recognizes public power utilities that demonstrate proficiency in four key disciplines: reliability, safety, workforce development, and system improvement. Criteria include sound business practices and a utility-wide commitment to safe and reliable delivery of electricity.

“Receiving an RP3 designation is a great honor signifying a utility has demonstrated commitment to industry best practices,” said Troy Adams, Chair of APPA’s RP3 Review Panel and General Manager at Manitowoc Public Utilities, Wisconsin. “And ultimately, the culture developed from this pursuit of excellence and continued improvement through the RP3 program results in measurable value delivered to the local community.”

This is the eighteenth year that RP3 recognition has been offered. A full list of designees is available on the APPA website at: RP3 Designees.

On July 31, Plant Vogtle Unit 3 entered commercial service, adding 250 MW of emissions-free generation capacity to MEAG Power’s portfolio, an equivalent amount to power an estimated 113,500 homes and businesses. Vogtle Unit 3 is the first newly constructed nuclear unit to enter service in the U.S. in more than 30 years.

“Vogtle Unit 3 entering commercial service is a monumental achievement that reflects the tremendous hard work, dedication and perseverance of thousands of workers on-site, as well as all the current and past employees of MEAG Power and the Unit’s other co-owners, MEAG Power Board members and the countless utility and city government employees of the 49 Participant communities we serve across Georgia,” said MEAG Power President & CEO Jim Fuller.

“Bringing Vogtle Unit 3 to commercial operation – and continuing the work on Unit 4 toward an in-service date later this year or early next year – highlights MEAG Power’s commitment to serving the needs of our Participant communities,” Fuller continued. “Vogtle Units 3 & 4 will provide up to 500 MW of clean energy to our Participant communities for the next 60 to 80 years – providing critical non-emitting power to present and future generations.”

Vogtle Unit 3 passed its final testing July 27 and was declared available for reliable dispatch by Southern Nuclear, which will operate the new units for the Vogtle co-owners: MEAG Power, Georgia Power, Oglethorpe Power and Dalton Utilities. The co-owners then agreed to declare Unit 3 in commercial operation on July 31.

To mark the momentous occasion, the Vogtle co-owners each sent a small delegation to the site for a celebration event the morning of the 31st that included members of the Georgia Public Service Commission. A much larger event is being planned that will include larger delegations from each co-owner and off-taker, along with numerous state and national government officials. MEAG Power will provide further information to Participants when details of the larger event become available.

On July 28, Vogtle Unit 4 received the 103(g) finding from the Nuclear Regulatory Commission (NRC), signifying that the unit has been constructed and will be operated in conformance with the Combined License and NRC regulations. No further NRC findings are necessary in order for Southern Nuclear to load fuel or begin the startup sequence for Unit 4, which is expected to enter commercial operation late this year or early in 2024.

The MEAG Power Annual Meeting is a unique once-a-year opportunity to gather a broad spectrum of Participant elected officials and staff, our business partners and industry expert speakers to discuss the most important areas of our business and the industry. Topics included proposed legislation and the political policy environment that could affect our Participant communities, industry changes, trends and challenges – and strategies for meeting them.

This year’s Annual Meeting offered detailed insight into all of these areas and more, as well as the chance for Participants and MEAG Power staff to renew relationships and share knowledge, and for Participants to perform the vital duty of electing the MEAG Power Board members.

Before the general session on Tuesday, Participant voting delegates elected Albany, Ga., Mayor Pro Tem Chad E. Warbington to fill the Board vacancy resulting from Newnan Mayor L. Keith Brady’s stepping down from the Board after 21 years of service. In addition, Acworth Alderman L. Timothy Houston, Sr., and Monroe businessman Gregory P. Thompson were re-elected to new terms on the Board.

The full program included a detailed update on MEAG Power’s operations and Plant Vogtle from President and CEO Jim Fuller. (See the Plant Vogtle Unit 3 Enters Service article in this issue.) Dr. Roger Pielke, professor of Environmental Studies at the University of Colorado, provided a fascinating look at the Evolving Energy Landscape.

Florida Municipal Power Agency General Manager and CEO Jacob Williams spoke about Florida’s Public Power Outlook and provided a cautionary tale of a lack of diversity in generation portfolios. Andrew Busch, an economic futurist and the former Chief Market Intelligence Officer for the U.S. government, offered a look into what the future may hold for the U.S. economy.

Breakout sessions included a deep dive into Regulatory Challenges in Power Supply, featuring Rob Talley, President, Talley & Associates, Inc., along with MEAG Power Senior Vice President and COO Steve Jackson and Director of Power Generation Michele Jackson.

In addition, Daryl Ingram, ECG Senior Vice President and Chief External Officer, presented a session on economic development. And Samantha Hart and Brynne Gallahue from Milepost led a session on Communicating the Value of Public Power: Educating Kids & Families, featuring Milepost’s Monster Detective Collective program.

After the general session and breakouts on Tuesday, at the evening event both Mark Tanner, Generation Asset Manager at Plant Vogtle, and Tim Turner, Principal Financial Analyst, were presented the President’s Award from Jim Fuller in recognition of their service and dedication to MEAG Power and our Participant communities

The Environmental Protection Agency (EPA) published proposed rules for addressing greenhouse gas (GHG) emissions from fossil fuel-fired electric generating units on May 23, 2023. The rules address existing coal-fired and oil/gas-fired steam power plants, existing large gas-fired combustion turbine power plants and new combustion turbine power plants.

The rules propose sweeping changes to the electricity generation industry within the next 6.5 years, and rely heavily on significant and rapid development of new clean energy infrastructure within the same time frame, supported by trillions of dollars of tax-credit incentives under the Biden Administration’s Inflation Reduction Act. The rules are expected to be finalized in March 2024 and will likely be subject to court challenge.

MEAG Power has worked with our industry trade organizations APPA, LPPC and AFFORD to prepare and submit comments to the EPA on these rules. Also, we’ve prepared our own comments to EPA on how these rules impact our ability to continue to supply low-cost, reliable power to our Participants: click MEAG EPA GHG Comments to view. We have also met with the Georgia Environmental Protection Division (GAEPD) to address our concerns and will continue to meet with other stakeholders to provide our input and concerns.

In addition, MEAG Power is being proactive and evaluating the future options related to Scherer Units 1 and 2. Through the integrated resource plan (IRP) effort, we are evaluating key issues such as what is the likely retirement date, what resources are available to maintain reliability, and are there ways to add certainty into the process. As we wrap up the IRP process later this year, the Participants will be receiving more details on this evaluation.

If finalized as proposed, the rules could have a direct impact on MEAG Power’s ownership share of Plant Scherer Units 1 and 2, as well as a direct impact on new combustion turbine power plants that MEAG may invest in for future power generation needs. And while the Wansley CC combustion turbine units are not considered large gas-fired combustion turbines by EPA under these rules, EPA asserts that they will be addressing the need for GHG rules for all other gas-fired combustion turbine power plants, which will implicate the Wansley CC.

The rules propose essentially four “Best System of Emission Reduction (BSERs)” for reducing GHG emissions from coal-fired power plants: 1) retire prior to Jan. 1, 2032; 2) starting by Jan. 1, 2030, operate at no more than a 20% capacity factor and retire by Jan. 1, 2035; 3) starting by Jan. 1, 2030, co-fire with natural gas at the 40% level and retire by Jan. 1, 2040; and 4) starting by Jan. 1, 2030, capture 90% of the CO₂ in the flue gas, transport it and store it in a certified storage facility.

This fourth BSER – called Carbon Capture and Sequestration, or CCS – is currently operating on only one small coal-fired power plant in Canada, and was subsidized by the Canadian government. Based on this experience and other Department of Energy (DOE)-funded engineering and design studies in the U.S., MEAG Power estimates that an investment of upwards of $2.5 billion per Scherer unit could be required to achieve carbon capture. However, capture technology has yet to be demonstrated or proven on units as large as the Scherer units.

In addition to investment in carbon capture, pipelines would need to be built to transport the compressed CO₂ gas to a storage facility. These storage facilities are envisioned by EPA and DOE to be underground geological formations such as seams of a former mine. As with carbon capture, such storage facilities are still unproven and undeveloped.

Scherer Units 1 and 2 will be 50 years old by 2032 and 2034, respectively, and ready for either life extension work or retirement. Retrofitting these units with GHG-emissions technologies by 2030 (for either natural gas co-firing or CCS) will result in stranded investment if MEAG Power decides to retire after 50 years of operation.

For existing large combustion turbine power plants, the rules propose two BSERs: either 1) co-fire with low-GHG hydrogen at the 30% level by Jan. 1, 2032, then increasing to 96% by Jan. 1, 2038, or 2) capture 90% of the CO₂ in the flue gas, transport it and store it in a certified storage facility.

Currently, there are very limited supplies of low-GHG hydrogen, so new electrolysis production facilities powered by renewable energy sources will need to be developed, along with a network of pipes and storage facilities to transport large quantities of hydrogen needed by power generation facilities.

EPA’s assessment of the impact on the cost of generation with low-GHG hydrogen co-firing appears to be based on ideal conditions and is somewhat refuted by data provided in Technical Support Documents that accompanied the proposed rule. Based on data provided, we’ve assessed that the cost of 30% and 96% hydrogen blended fuels could be 3 times and 10 times as much as burning natural gas alone, respectively.

And while the cost of technology for capture of CO₂ gas is less for combustion turbine power plants than for coal-fired power plants, the required investment is still significant and, again, investment would be needed for transport pipelines and storage facilities.

Finally, for new combustion turbine power plants, the rules propose BSERs depending on how the combustion turbine is to be operated. For peaking operation (less than 20% capacity factor), BSER is the combustion of low GHG fuels such as natural gas; for intermediate operation (greater than 20% capacity factor and less than the design efficiency of the turbine (approximately 50% capacity factor), BSER is co-firing low-GHG hydrogen at the 30% level by Jan. 1, 2032; and for base load units (capacity factor greater than design efficiency (approximately 50% capacity factor), BSER is either 1) co-fire with low-GHG hydrogen at the 30% level by Jan. 1, 2032, then increasing to 96% by Jan. 1, 2038, or 2) capture 90% of the CO₂ in the flue gas, transport it and store it in a certified storage facility.

It’s difficult to imagine that the infrastructure required for natural gas co-firing at coal-fired power plants, low-GHG hydrogen co-firing at gas plants, and CCS–even though heavily incentivized through the IRA and thus largely supported by US taxpayers–can be in place to meet the proposed rules’ compliance deadlines, as early as 6.5 years out.

During the 5-year period from 2018 through 2022, 66% of the energy supplied by MEAG Power to its communities was emissions-free, resulting in a 5-year average energy supply emission rate of 412 lb. CO₂/MWH. MEAG Power’s significant investment in forthcoming emissions-free energy from Plant Vogtle Units 3 and 4, and planned transition away from fossil-fueled resources to renewable resources, show the potential for an economic path for MEAG Power to be nearly 90% emissions-free by 2045.

These proposed rules ignore the huge investment our Participants have already made in environmental control systems for Scherer Units 1 and 2, as well as in new emission-free energy from Vogtle Units 3 and 4.

The wild price fluctuations were driven by numerous unprecedented disruptions, including the war in Ukraine and an increased reliance on natural gas to fill the generation deficit as more coal plants are decommissioned and not enough replacement power has yet been added to the grid. In addition, gas pipeline capacity is lagging, coal delivery constraints limited inventories at the remaining coal plants, and severe weather events played a role in the price spikes seen during the year.

The average monthly market price for natural gas was remarkably stable for the period from February 2018 through June 2021, when it starting rising before normalizing again at year-end 2021, as shown in the chart below. In 2022, the market price was as low as about $45 per MWh and as high as about $145 per MWh.

More information about the contributing factors to this instability is helpful in understanding what an atypical year it was. And while 2023 followed that same trend line early on, there may be some relief in sight, according to research by Moody’s Investors Services, a world-renowned analytical and risk management company. However, volatility and risk of extreme pricing events are here to stay.

Non-Weather Factors

After Russia invaded Ukraine, much of Europe came to an abrupt realization that it had become overly dependent on Russian natural gas as its primary fuel source for electricity generation and heating. Some major Western European countries, led by Germany, had forsaken nuclear energy while also moving away from coal in favor of gas and renewable energy. Suddenly, much of Europe was looking for new sources of gas as Russia threatened to cut the supply entirely to countries that opposed its invasion.

Among the markets those countries tapped was the U.S. market, as shipments of liquefied natural gas (LNG) from the U.S. to Europe increased throughout the year. Commodities trading follows market pricing trends, and with European demand skyrocketing, pricing for natural gas in the U.S. market also rose.

At the same time, the demand for natural gas in the U.S. stayed strong, because of the need to fill the generation void left in the wake of ongoing coal plant retirements and limitations on coal deliveries. Despite record additions of solar and wind to the U.S. grid over the past 3-4 years, it’s not sufficient to replace the reduction in coal-fired generation being removed, and the intermittent nature and low capacity factors of solar and wind generation alone aren’t an equitable replacement for the baseload nature of coal facilities. That domestic demand likewise put upward pressure on natural gas prices.

Winter Storm Elliot

Adding to the mix at the end of an already chaotic year were unexpected pipeline distribution issues and yet another unprecedented weather event, Winter Storm Elliot, which wreaked havoc in the market in late December.

With temperatures plummeting over much of the U.S., demand for natural gas greatly increased from both home heating and electricity generation requirements. On Dec. 23, natural gas demand surged to 160 billion cubic feet (Bcf)/day with power demand 45% higher than average and residential/commercial demand 55% higher than average. The massive increase in natural gas demand required the market to utilize over 200 Bcf of natural gas storage during event. Several pipelines issued Force Majeures, limiting capacity deliverability for power generation.

The Southern Balancing Authority (SBA) enacted the Energy Emergency Alert system and issued alerts, escalating to an Energy Emergency Alert Level 2 before returning to normal operations on Dec. 26. MEAG Power enacted our emergency procedure and notified the Participants to take electric load conservation measures. Although not required in the SBA, other utilities did implement load management due to their system conditions.

All resources were available on the MEAG Power peak load hour, which occurred on Dec. 24: 1,786.3 MW. Only one generation resource was not being utilized on the peak hour: One of the Gas Turbines at Wansley 9 was not utilized due to a lack of available pipeline capacity. Plant Addison was dispatched on Fuel Oil for 41 consecutive hours — from the Friday evening peak (Dec. 23) through Sunday morning peak (Christmas day).

The only “silver lining” was the timing of this event. Load requirements were dampened by an estimated 7% compared to a non-holiday weekday, as more people were off work, lessening commercial and industrial demand. In addition, the event lasted about 2 days, which limited the impact.

Natural gas spot pricing averaged $8.49/MMBtu during the peak 5 days (Dec. 23-27), with pipeline capacity pricing averaging $47.17/MMBtu during the same period. Plant Addison was the highest priced unit dispatched, at an estimated price of $285/MWh.

Moody’s Predicts Relief

According to a recent Moody’s Investors Services research note, lower natural gas prices in 2023 will lead to a 35-45% dip in the price of on-peak power in most markets across the United States.

“Natural gas and power price expectations for 2023 have dropped steeply,” the firm said. The unusually warm winter has moderated heating demand and left gas storage facilities with inventories about 21.5% above their historical five-year averages.

“Expected 2023 natural gas prices are around 44% lower than forward market expectations in December,” Moody’s said. That has resulted in 2023 expected power prices more than 40% lower than 2022 in some regions, according to the research note, which cited S&P Global Market Intelligence data.

MEAG Power’s Projections

Although 2023 natural gas and energy market prices are lower, all of the factors contributing to December’s extreme pricing event remain. The energy market is changing from a long market — with excess generation and gas capacity — to a short market as a result of the coal plant retirements and the increased use of gas for energy demands and export.

Being short creates the environment for volatility in the markets whenever extreme weather occurs, or unexpected unit or gas pipeline outages occur. Ensuring that our resource portfolio is diverse and covers the majority of our needs can reduce risk and provide stability in cost during these extreme conditions.