Georgia Power Company’s Application · 10/22/2014 · Company and the Commission will continue to advance cost-effective solar development. 1.2 Certification of Solar Resources

PUBLIC DISCLOSURE

Georgia Power Company’s Application

for the Certification of the 2015 and 2016 Advanced

Solar Initiative Prime Power Purchase Agreements

and Request for Approval of the

2015 Advanced Solar Initiative

Power Purchase Agreements

Docket No. 38877

PUBLIC DISCLOSURE

Georgia Power Company’s Application

for the Certification of the 2015 and 2016 Advanced Solar Initiative

Prime Power Purchase Agreements and Request for Approval of the


Power Purchase Agreements Docket No. 38877

Applicant name, address and principal place of business:

Georgia Power Company

241 Ralph McGill Blvd NE

Atlanta, Georgia 30308

Authorized person to receive notices or communications with respect to application:

Cofield Widner

Regulatory Affairs, BIN 10213




Voice: 404-506-1426

Fax: 404-506-7253

Location for public inspection:




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Affidavit and Basis for the Assertion That Redacted Portions

of Georgia Power Company’s Application

for the Certification of the 2015 and 2016 Advanced Solar

Initiative Prime Power Purchase Agreements and Request for

Approval of the 2015 Advanced Solar Initiative

Power Purchase Agreements are Protected as Trade Secret

As part of its Application for the Certification of the 2015 and 2016 Advanced Solar

Initiative Prime Power Purchase Agreements and Request for Approval of the 2015 Advanced

Solar Initiative Power Purchase Agreements in Docket No. 38877, (the “Application”) Georgia

Power Company (“Georgia Power” or the “Company”) is submitting to the Georgia Public

Service Commission (the “Commission”) copies of certain Power Purchase Agreements

(“PPAs”), economic analysis and projected energy and demand information and reserve margins

of the Company (the “Information”). The trade secret portions of the Information (as

highlighted) constitutes trade secret information of Georgia Power and its affiliates, and its PPA

counterparty, and is therefore protected from disclosure under Commission Rule 515-3-1-.11.

The trade secret portions of the Information derive economic value from not being

generally known to, and not being readily ascertainable by proper means by other persons who

can obtain economic value from their disclosure or use. Specifically, the terms of each PPA that

have been redacted contain pricing, account balance requirements and other delivery parameters

that are specific to the winning bids. The trade secret portions of the Information are proprietary

to the Company and the counterparties to the PPAs, and not generally known by the public.

Revealing these terms would compromise the Company’s ability to procure the best cost

resources from other independent power suppliers in the future. In the event the trade secret

portions of the Information were released, it is quite likely that future counterparties would use

this information to set the floor in constructing their own offers, thus artificially and inefficiently

setting a market price and affecting other contract terms, resulting in agreements that may not be

representative of the best cost resource that the market could offer. In addition, parties to the

PPAs have agreed to maintain the confidentiality of these terms. Compromising the

confidentiality of the trade secret portions of the Information could also harm the Company in its

attempts to negotiate PPAs in the future, as counterparties may fear compelled disclosure of key

contractual terms.

The trade secret portions of the Information derive economic value from not being

generally known to, and not being readily ascertainable by proper means by other persons who

can obtain economic value from its disclosure or use. Certain trade secret portions of the

Information provided include detailed forecasted information regarding the Company’s future

energy and demand growth and projected reserve margins and could be used to determine the

Company’s long-term and short-term capacity needs. If revealed to the public, a generation

wholesaler or power marketer could use the trade secret portions of the Information to tailor

proposals with the intention of pricing products in a manner that would undermine the

Company’s market position. Such disclosure could unfairly allow competitors to manipulate the

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wholesale market and ultimately harm retail customers through higher rates and less reliability.

Lastly, the Company’s competitors are not required to file their respective forecast information.

The trade secret portions of the Information contained herein also include details

concerning Georgia Power’s economic analyses of the PPAs, all of which would have economic

values to other persons and competitors. If Georgia Power’s suppliers had access to the trade

secret portions of the Information, it would place the Company at a severe economic

disadvantage and provide an economic advantage to competitors or bidders, who would thus

have access to Georgia Power’s economic analysis of its PPAs, which could, in turn, increase

costs to Georgia Power. This exposure would harm Georgia Power in its future PPA negotiation

efforts. Georgia Power’s ability to negotiate the optimum price and contract terms and conditions

would be undermined if competitors and suppliers had access to the analysis contained in the

trade secret portions of the Information. Ultimately, the customers of Georgia Power would be

harmed by higher rates and less reliability if such trade secret portions of the Information were

publicly available.

The trade secret portions of the Information are subject to extensive efforts to maintain

their confidentiality. Only select Georgia Power and Southern Company affiliate personnel and

their legal counsel are granted access to the trade secret portions of the Information. Those

personnel receive access only on a “need to know” basis. If a party outside of Georgia Power and

Southern Company affiliates and their legal counsel are granted access to the trade secret

portions of the Information, the party is required to sign a confidentiality agreement with respect

to the trade secret portions of the Information.

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Kyle C. Leach, first being duly sworn, deposes and states that he has reviewed the Application

and all other related documents included in this filing in Docket No. 38877, and that the specific

information designated as trade secret constitutes trade secrets in accordance with O.C.G.A.

Article 27 of Chapter 1 of Title 10.

________________________________

Kyle C. Leach

Director of Resource Policy & Planning


Subscribed and sworn to before me this 10th day of October, 2014.

____________________

Notary Public

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Georgia Power Company’s Application for the Certification of the 2015 and 2016

Advanced Solar Initiative Prime Power Purchase Agreements and

Request for Approval of the 2015 Advanced Solar Initiative


Docket No. 38877

TABLE OF CONTENTS

1. Executive Summary ...................................................................................................................................... 7

1.1 Program History .............................................................................................................................. 7

1.2 Certification of Solar Resources ..................................................................................................... 7

2. Issuance of the Advanced Solar Initiative and ASI-Prime Request for Proposals ...................................... 12

3. Bid Evaluation ............................................................................................................................................. 13

4. Winning Bidders’ PPAs .............................................................................................................................. 15

5. Terms of the PPAs ....................................................................................................................................... 15

5.1 Terms of Purchase ......................................................................................................................... 15

5.2 Transmission and Delivery of Energy ........................................................................................... 16

5.3 Renewable Energy Credits ............................................................................................................ 16

5.4 Cost Benefit Analysis and PPA Pricing ........................................................................................ 17

5.4.1 Cost Benefit Analysis ..................................................................................................... 17

5.4.2 PPA Pricing .................................................................................................................... 17

6. Certification Requirements .......................................................................................................................... 19

6.1 Impact to 2013 IRP ....................................................................................................................... 19

6.2 Revised Near –Term Action Plan ................................................................................................. 19

6.3 Proposed Ratemaking Treatment of Costs .................................................................................... 20

6.4 Additional Sum ............................................................................................................................. 21

7. Conclusion ................................................................................................................................................... 21

Appendix A: ASI-Prime PPA with Butler Solar LLC

ASI-Prime PPA with LS-Pawpaw, LLC

ASI-Prime PPA with Decatur Parkway Solar Project, LLC

ASI-Prime PPA with White Pine Solar, LLC

ASI-Prime PPA with White Oak Solar, LLC

ASI-Prime PPA with Live Oak Solar, LLC

Appendix B: ASI PPA with Decatur County Solar Project, LLC

ASI PPA with Hecate Energy Old Midville Road LLC

ASI PPA with Solar Glynn LLC

ASI PPA with Butler Solar Farm, LLC

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Georgia Power Company’s Application for the

Certification of the 2015 and 2016 Advanced Solar Initiative Prime

Power Purchase Agreements and Request for Approval of the



1. Executive Summary

1.1 Program History

Georgia Power Company (“Georgia Power” or the “Company”) files with the

Georgia Public Service Commission (the “Commission”) its Application for Certification

of the Advanced Solar Initiative (“ASI”) and ASI Prime power purchase agreements

(“Application”) to procure over 500 megawatts (“MW”) of utility scale solar resources.

Through the programs developed under the Commission’s constructive regulatory

support, Georgia Power’s portfolio of purchases from renewable generators is expected to

double by the end of 2016. With Commission guidance, and in alignment with the

Company’s Integrated Resource Plan (“IRP”), Georgia Power has accomplished this

substantial development by utilizing market based solicitations that have demonstrated

that the market for solar is both robust and competitive, resulting in purchased power

agreements (“PPA”) that are at prices well below the Company’s projected avoided cost.

Just as importantly, the growth of solar in this state has occurred utilizing voluntary

programs like ASI and ASI Prime. The result is that Georgia is recognized for having one

of the largest solar portfolios in the nation, while leading the nation in solar development

over the past few years. The Company is also credited with having the largest voluntary

solar program in the country. By certifying the PPAs included within this filing, the

Company and the Commission will continue to advance cost-effective solar development.

1.2 Certification of Solar Resources

Pursuant to O.C.G.A. § 46-3A-4, Georgia Power seeks to certify the PPAs described

below. Under the ASI and ASI-Prime programs, the Company requested proposals to

fulfill a 495 MW portfolio from utility-scale solar photovoltaic (“PV”) generating

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facilities in Georgia through a single request for Proposal (“RFP”) process overseen by

the Commission Staff and an Independent Evaluator (“IE”).

ASI Prime

The Final Order in the 2013 IRP proceeding in Docket No. 36498 (“Final IRP Order”),

identified 525 MW of need for additional solar resources, with 425 MW of the need to be

filled with utility scale projects. The Final IRP Order required that 210 MW be in service

by the end of 2015 and 215 MW be in service by the end of 2016. The 2015 and 2016

Advanced Solar Initiative Prime (“ASI-Prime”) program was designed to be an extension

of the original ASI program, with the necessary modifications to accommodate larger

facilities and otherwise fill the solar resource need identified in the 2013 IRP. Although

the RFP sought to procure 425 MW for the ASI-Prime portfolio, upon review of the bids,

the Company, the Commission Staff and IE decided that securing the best cost portfolio

required the winning portfolio to include 438.67 MW, which is an increase of 13.67 MW.

The six bidders who executed ASI-Prime PPAs will provide the Company with a total of

438.67 MW, with 209.92 MW expected to reach commercial operation in 2015 and the

remaining 228.75 MW expected to reach commercial operation in 2016.

The Company now seeks to certify:

(1) A thirty (30) year PPA with Butler Solar LLC that will provide energy and

capacity benefits and the related Renewable Energy Credits (“RECs”) from a 100

MW solar facility beginning on December 31, 2015. The Butler 100 MW solar

facility is located in Butler, Georgia and this PPA will terminate on December 31,

2045.

(2) A thirty (30) year PPA with LS-Pawpaw, LLC that will provide energy and

capacity benefits and the related RECs from a 30 MW solar facility beginning on

December 31, 2015. The Pawpaw Site B Project is located in Butler, Georgia and

this PPA will terminate on December 31, 2045.

(3) A twenty five (25) year PPA with Decatur Parkway Solar Project, LLC that will

provide energy and capacity benefits and the related RECs from a 79.92 MW

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solar facility beginning on December 31, 2015. The Decatur Parkway Solar

Project is located in Bainbridge, Georgia and this PPA will terminate on

December 31, 2040.

(4) A thirty (30) year PPA with White Pine Solar, LLC that will provide energy and

capacity benefits and the related RECs from a 101.25 MW solar facility beginning

on December 31, 2016. The White Pine Solar Power Project is located in Butler,

Georgia and this PPA will terminate on December 31, 2046.

(5) A thirty (30) year PPA with White Oak Solar, LLC that will provide energy and

capacity benefits and the related RECs from a 76.5 MW solar facility beginning

on December 31, 2016. The White Oak Solar Power Project is located in

Waynesboro, Georgia and this PPA will terminate on December 31, 2046.

(6) A thirty (30) year PPA with Live Oak Solar, LLC that will provide energy and

capacity benefits and the related RECs from a 51 MW solar facility beginning on

December 31, 2016. The Live Oak Solar Power Project is located in Metter,


These new resources reinforce the Commission’s and the Company’s commitment to

expanding solar development in Georgia and furthers the Company’s commitment to

diversifying its electric supply mix for customers in an economic way. The ASI-Prime

PPAs represent additional opportunities to increase the Company’s renewable generation

portfolio and add resources that provide both energy and capacity benefits to Georgia

Power customers at pricing below the Company’s projected avoided costs. The Company

now seeks certification of this portfolio of ASI-Prime PPAs because the need for the new

resources are sourced from a need identified in the Final IRP Order, and certification of

the addition of new energy with a capacity benefit is appropriate under Georgia law and

the Commission Rules.

ASI

In accordance with the Commission’s Orders governing the ASI program, the Company

sought to procure seventy (70) MW to fulfill the requirements of the ASI program. The

four bidders who executed ASI PPAs will provide the Company with a total of 76.58

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MW, which are scheduled to reach commercial operation in 2015. This is 6.58 MW more

than what was sought to be procured, but as explained previously this portfolio was

selected because it represents the best cost portfolio for customers.

(1) A twenty (20) year PPA with Decatur County Solar Project, LLC that will provide

energy and capacity benefits from an 18.9 MW solar facility beginning on

January 1, 2016. The Decatur County Solar Project is located in Bainbridge,


(2) A twenty (20) year PPA with Hecate Energy Old Midville Road LLC that will

provide energy and capacity benefits from a 20 MW solar facility beginning on

January 1, 2016. The Hecate Energy Old Midville Road solar facility is located in

Millen, Georgia and this PPA will terminate on December 31, 2035.

(3) A twenty (20) year PPA with Solar Glynn LLC that will provide energy and

capacity benefits from a 17.68 MW solar facility beginning on January 1, 2016.

The Project Glynn solar facility is located in Brunswick, Georgia and this PPA

will terminate on December 31, 2035.

(4) A twenty (20) year PPA with Butler Solar Farm, LLC that will provide energy

and capacity benefits from a 20 MW solar facility beginning on January 1, 2016.

The Butler Solar Farm, LLC solar facility is located in Butler, Georgia and this

PPA will terminate on December 31, 2035.

The capacity need that forms the basis of the ASI program was born out of the 2015 need

identified in the 2010 IRP. Georgia Power issued an RFP to meet that need and included

in that RFP was the ability for Public Utility Regulatory Policies Act (“PURPA”)

Qualifying Facilities (“QFs”) to notice into the solicitation to supply 250 MW of that

need. Historically, the QFs have noticed into the Company’s RFPs but for various

independent reasons, many such QFs have not brought the resulting projects to fruition.

Therefore, it was an appropriate and logical assumption at the time to believe a portion of

the MW assigned to QFs from the 2015 RFP may not reach commercial operation, and

that it would be appropriate to use some of the set aside MW from the QF program to

create the ASI program.

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The ASI utility scale program required that participants obtain QF status, and like the QF

program, had project size restrictions. The initial ASI program used 75 MW of that 250

MW, and used the incremental capacity equivalent (“iced”) MW such that it became 210

MW of program need to be filled through the ASI program (120 MW of utility scale and

90 of distributed generation, as discussed in more detail below). Last year, the

Commission approved 50 MW of utility scale ASI PPAs for the benefit of customers.

Because contracting under PURPA is an obligation under federal law, the formalities of

state certification are not required, nor are they prohibited. Indeed, the Commission has

full oversight over the implementation of PURPA and pre-approves a standard offer

contract for use with PURPA QFs. In the past the Commission has “approved” and

“deemed certified” QF contracts utilizing the Commission approved processes for

contracting. The Commission’s dual reference to approval and certification is consistent

with the view that approval and certification for QF agreements are equivalent. Due to

the fact that the ASI program was taken from MW identified for QF resources in the 2015

RFP, the Company did not make a formal certification application for those contracts, but

sought approval in a manner consistent with the QF program that served as the basis for

the ASI program.

In the current case, the ASI-Prime resources are not required, nor do they necessarily

qualify to be QFs, nor is the need the resources represent sourced from existing QF

programs. As such, ASI-Prime resources are appropriately being brought forward for

state certification by the Commission to meet the resource need specifically identified by

the Commission in the 2013 IRP. By including the ASI resources in this Application

along with the ASI-Prime resources, the Commission will have the ability to certify and

or approve these resources along with the ASI-Prime resources. If the Commission

believes it would be appropriate to certify all ten PPAs, the Company respectfully

requests that the Commission grant such certificates for all ten PPAs described in this

Application.

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2. Issuance of the Advanced Solar Initiative and ASI-Prime Request for Proposals

Both the ASI and ASI-Prime utility scale portfolios have been procured through the

issuance of Georgia Power’s ASI and ASI-Prime RFP. This year’s RFP, approved by the

Commission on April 10, 2014, sought to fulfill a goal of 70 MW (60 MW for the ASI

Program, plus the remaining 10 MW left unfilled by the 2013 ASI RFP). These new solar

generators are required to be in service by year-end 2015 as contemplated by the

Commission’s Order in Docket No. 36325. An additional 425 MW from solar generators

were procured in accordance with the Commission’s Final IRP Order. Specifically, that

order required 210 MW to be in service by year-end 2015 and 215 MW to be in service

by year-end 2016. Georgia Power issued one RFP to procure all 495 MW sought in order

to best ensure that the resources were procured in the most efficient and transparent

manner within the time constraints dictated by the Commission’s orders.

In accordance with the Commission’s rule governing RFPs, the Company drafted the ASI

and ASI-Prime RFP and PPAs (the “RFP Documents”) with input from potential bidders,

the Commission Staff and the IE over a period of several months. Drafts of the RFP

Documents were posted to the IE website on December 19, 2013, thereby opening the

official comment period. On January 13, 2014, a Bidder’s Conference was held at

Georgia Power’s headquarters to allow potential bidders the opportunity to meet directly

with Georgia Power and the IE, and to ask additional questions and to make further

comments concerning the RFP Documents. The RFP Comment Period concluded January

31, 2014 and each of the thirty-five sets of comments uploaded to the IE website were

reviewed by Georgia Power, the IE and Commission Staff. The IE website received over

one hundred questions seeking clarification of certain terms in the RFP Documents

through the Q&A function of the website. The Company responded to all comments

received during the official comment period and all questions posted to the IE website.

Revised RFP Documents reflecting bidder comments, questions and concerns were filed

with the Commission on February 21, 2014.

Georgia Power re-posted the Revised RFP Documents on the IE’s website at the direction

of the Commission for two additional comment periods, which commenced on March 13,

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2014 and March 20, 2014. The first additional comment period was designed to elicit

further bidder feedback on the regulatory out (“Reg-Out”) provisions in Section 3.3 of the

PPAs. The Reg-Out provisions were further refined as a result of bidder comments to

clarify the mutuality of these provisions and make clear that PPA counterparties retain

the ability to terminate the PPA in the event the Commission ever took any lawful actions

available to it to interrupt the contract in a way that was materially adverse to the parties.

The Company and the IE provided clarification and background information about the

evergreen Reg-Out provisions under Georgia law to reassure bidders.

The second additional comment period was designed to allow bidders to comment one

final time on any of the pro forma provisions of the PPA prior to the Commission

approving the pro forma PPA and locking down the substantive terms and conditions.

Commission Staff recommended final modifications to the RFP Documents that

addressed various bidder concerns and thereafter recommended that the Commission

approve the RFP Documents as drafted. A revised IE report provided to Commission

Staff on March 27, 2014 stated that the “IE believes the Draft RFP Documents are

comprehensive and free of apparent bias for or against any bid type” and “the RFP makes

appropriate provisions to treat all bids when submitted … in an equivalent manner.”1 On

April 10, 2014, the Commission issued its order approving the final RFP Documents as

modified.

3. Bid Evaluation

Interested participants submitted bids from April 2, 2014 through April 30, 2014. The

Company received offers for over 5,100 MW through 142 unique proposals from 56

different bidders. As directed by the Final IRP Order for ASI-Prime resources offered in

the solicitation, the Company considered all proposals including those offering any and

all financial structures, and bids with terms ranging from fifteen to thirty years. While the

primary evaluation criterion was economic benefits to customers, as required by the RFP,

the evaluation also included non-price factors such as projects with a meaningful

1 Order Approving Final Documents for the 2015 ASI, 2015 ASI-Prime, and 2016 ASI-Prime Solicitations, 4 (April

10, 2014).

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economic impact on the Georgia economy, the inclusion of RECs from the facility,

financial strength and experience of the developer and interconnection due diligence.

Acceptable bids for the ASI-Prime portfolios could not exceed the Company’s projected

levelized avoided cost for the term of the PPA, as filed with the Commission in Docket

Nos. 4822 and 16573. Bidders could submit a bid for a single facility into any

combination of the three portfolios (2015 ASI, 2015 ASI-Prime or 2016 ASI-Prime) so

long as each bid was unique with respect to facility location, size, point of

interconnection, tracking capability, panel orientation or any other characteristic that

would alter the facility’s performance.

Proposals submitted into the RFP were considered and evaluated against each other by

the Company, and the evaluation results were confirmed and approved by the IE and the

Commission Staff. The costs of transmission and distribution grid improvements

necessary to integrate the projects were included in the evaluation.

First, the Company evaluated bids, identified the Competitive tier, and selected a Short

List and a Reserve List for the 210 MW solicited to fill the 2015 ASI-Prime portfolio.

Next, the Company evaluated bids, identified the Competitive Tier, and selected a Short

List and a Reserve List for 215 MW to fill the 2016 ASI-Prime portfolio using those

proposals not selected for the Short List for the 2015 ASI-Prime portfolio. Finally, the

Company evaluated bids, identified the Competitive Tier, and selected a Short List and a

Reserve List for the 70 MW to fill the 2015 ASI portfolio. The bids selected for the Short

List were based upon the best value of the individual proposals to the Company’s

customers. One Short List bidder in the 2015 ASI-Prime portfolio withdrew its bid, and

as a result, the Company replaced that bid with the next best proposal from a bidder on

the Reserve List. Each bidder selected to the Short List was asked to enter into a PPA

based upon the pro forma PPA for use in the RFP that was approved by the Commission

on April 10, 2014. Throughout the process, the Commission Staff and the IE were

informed and independently verified the process steps taken by the Company as the

Competitive Tier, Short List and Reserve List was selected for each portfolio.

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4. Winning Bidders’ PPAs

As stated above, Georgia Power is entering into (1) ASI-Prime PPAs with Decatur

Parkway Solar Project, LLC; Butler Solar LLC; LS-Pawpaw, LLC; White Pine Solar,

LLC; White Oak Solar, LLC; and Live Oak Solar, LLC; and (2) ASI PPAs with Decatur

County Solar Project, LLC; Hecate Energy Old Midville Road LLC; Solar Glynn LLC;

and Butler Solar Farm, LLC (the “Winning Bidders”). Due to the pro forma nature of the

PPAs, no substantive changes to the terms were permitted after Commission approval of

the PPAs on April 10, 2014. The Company, the IE, and the Commission Staff met with

each Winning Bidder to discuss the pro forma terms of the PPA, and allowed Winning

Bidders to request clarifying edits. All Winning Bidders received revised PPAs with

aggregated clarifications identified during the Winning Bidders meetings. The PPAs were

executed by Winning Bidders by October 3, 2014 and counter signed by Georgia Power

on October 8, 2014. The effectiveness of the PPAs is expressly conditioned upon the

Commission’s approval.

Decatur County Solar Project, LLC and Decatur Parkway Solar Project, LLC have

recently notified Georgia Power that they intend to exercise their rights under their PPAs

to undergo changes of control transactions to sell their projects, totaling approximately

100MW to Georgia Power's affiliate, Southern Power Company, prior to the projects

reaching commercial operation.

Appendix A of this Application contains copies of the Winning Bidder PPAs for the ASI-

Prime program, and Appendix B of this Application contains copies of the Winner Bidder

PPAs for the ASI program.

5. Terms of the PPAs

5.1 Terms of Purchase

The PPAs are structured such that the Company purchases include the energy and any

RECs from the Winning Bidders’ solar facilities. The decision to offer RECs in any

bidder’s offer as a non-price factor is discussed below in Section 5.3. The energy to be

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delivered is priced below the avoided cost projections filed with the Commission under

Docket Nos. 4822 and 16573. The nature of this solar generation carries a capacity

benefit to the electric system that was included in the Cost Benefit Analysis. That is, the

economic analyses presented in Section 5.4 below reflect the benefits offered by these

PPAs to Georgia Power’s customers.

5.2 Transmission and Delivery of Energy

As required by the RFP, all of the parties to the ASI and ASI-Prime PPAs are required to

interconnect with the Georgia Power distribution system or the Georgia Integrated

Transmission System and bear all costs of the direct interconnection. Georgia Power will

be responsible for all system costs beyond the point of interconnection, and has included

its best estimate of such costs in the economic evaluations. Due to the tight timeframes

for this procurement as required by the Commission’s Orders, the PPAs contain certain

provisions that allow for projects to begin deliveries later than the Required Commercial

Operation Dates if the interconnection is not in place for reasons not caused by the action

or inaction of the PPA counterparty.

5.3 Renewable Energy Credits

The Company determined that it is in the best interest of customers to bundle the RECs

with the purchase of energy under the ASI-Prime PPAs in the event that a renewable

portfolio standard or other similar mandate is instituted and applicable to Georgia Power

and its customers. Accordingly, while the RFP did not require bidders to provide RECs

associated with the energy, Georgia Power was willing to accept the RECs if these

characteristics were included in a bidder’s proposal and bid price. In the evaluation of

bids, Georgia Power considered the RECs as non-price factors. While all of the Winning

Bidders did include the RECs and other Environmental Attributes associated with their

projects, they also were the bids that provided the best economic benefit to the

Company’s customers without consideration of the potential value of the RECs.

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5.4 Cost Benefit Analysis and PPA Pricing

5.4.1 Cost Benefit Analysis

The Company performed a Cost Benefit Analysis with regard to the PPAs for this

Application. The cost consists of the payments made to the solar generator plus any costs

associated with transmission or distribution improvements necessary to deliver the energy

to the customers. The benefit is the difference between the cost of energy from the solar

resources and the Company’s projected avoided cost (the “Net Benefit”). The payments

made to the solar generator are the bid price times the amount of energy delivered.

Energy is uniquely priced for each project as shown in Tables 5.5(A) and (B).

The transmission and distribution costs were provided by Georgia Power and Southern

Company Services Transmission and Distribution personnel based on the characteristics

of each facility described within the bids.

The avoided costs for each bid were calculated by applying the hourly avoided cost

projections from the 2013 IRP to the typical hourly output from the solar generator as

provided by the bidders. Each bid has a different avoided cost benefit because the typical

hourly outputs differ between bids due to diverse design parameters such as location,

tracking vs. fixed systems, the AC/DC ratio, orientation, etc.

In order to fairly compare projects with different sizes, the Net Benefit of each bid was

expressed in terms of a levelized $/MWh figure. The winning bids represent those

projects with the highest Net Benefit.

5.4.2 PPA Pricing

Tables 5.4 (A) and 5.4 (B) below provide the energy pricing for the ASI-Prime PPAs and

the ASI PPAs.

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Table 5.4 (A) – ASI-Prime PPAs

Contract Energy Price ($/MWh)

Annual

Period

Decatur

Parkway

Solar Project,

LLC

Butler Solar

LLC

LS-Pawpaw,

LLC

White Pine

Solar, LLC

White Oak

Solar, LLC

Live Oak

Solar, LLC

1 REDACTED REDACTED REDACTED REDACTED REDACTED REDACTED

























26 REDACTED REDACTED REDACTED REDACTED REDACTED





Table 5.4 (B) – ASI PPAs

Contract Energy Price ($/MWh)

Annual Period

Decatur

County Solar

Project, LLC

Hecate

Energy Old

Midville

Road LLC

Solar Glynn

LLC

Butler Solar Farm,

LLC

1 REDACTED REDACTED REDACTED REDACTED



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These pricing tables illustrate the fact that the ASI winning bids were procured at an

average cost of less than 6.5 cents per kilowatt-hour – two cents below the cost achieved

through the 2013 solicitation. Demonstrating both the robust nature of the marketplace

and its ability to provide competitive pricing when challenged to do so through a market

based RFP.

6. Certification Requirements

6.1 Impact to 2013 IRP

The procurement of the PPAs is based upon the 425 MW need identified in the 2013 IRP

Final Order. The analysis of these PPAs, as presented in Section 5.4, utilizes input data

and assumptions consistent with the 2013 IRP, and therefore, no IRP update is necessary

for this certification filing.

6.2 Revised Near –Term Action Plan

The Company has updated Table 4.1.1 below from the “IRP Main Document Reference

Tables” in Technical Appendix, Volume 1 of the 2013 IRP to reflect the additional

capacity provided by the ASI-Prime PPAs along with the 100 MW of distributed

generation included in the ASI-Prime program. Also reflected is the addition of the wind

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capacity from the Blue Canyon II and Blue Canyon VI PPAs certified on May 29, 2014,

as well as the cancellation of the Mitchell Biomass project, approved on July 11, 2014.

Impact to GPC 2013 IRP Table 4.1.1 - Georgia Power Territorial Base Case Load vs.

Existing Capability

Owned Purchased Capacity GPC

Peak Generating Generating Dispatchable Total Required to Reserve

Demand Capacity Capacity DSOs Capacity Meet GPC Margin

Year (MW) (MW) (MW) (MW) (MW) Target (MW) (%)

(A) (B) (C) (D) (E)

2013 REDACTED REDACTED REDACTED REDACTED REDACTED REDACTED REDACTED




















Notes (A) Territorial Load requirements less non-dispatchable DSOs

(B) 1. Reflects committed retirements as contained and approved in the GPC 2013 IRP

2. Reflects Mitchell 3 unavailable starting 4/16/2015 and not converting to biomass

3. Reflects McIntosh 1 available through 2015, then available 2016 and beyond at derated amount of REDACTED

4. Excludes any wholesale-to-retail capacity associated with retired units

(C) Includes territorial and imported power purchases

1. Reflects 998 MW associated with the 2015 RFP

2. Includes planned solar capacity additions associated with the Advanced Solar Initiative and Large Scale Solar

3. Includes the Blue Canyon purchase reflecting the REDACTED REDACTED REDACTED REDACTED REDACTED

4. Reflects updated assumptions for the additional 525 MW of solar capacity included in the Final Order in the 2013 IRP

(D) Values stated in combustion turbine equivalence terms

(E) Does not consider planning reserve sharing

6.3 Proposed Ratemaking Treatment of Costs

Georgia Power proposes to recover the PPA energy payments through the fuel cost

recovery mechanism. This proposed accounting treatment is consistent with the treatment

recently approved by the Commission for the Blue Canyon II and VI Wind PPAs

certified in Docket No. 37854.

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6.4 Additional Sum

The IRP statute provides for the Company to receive an additional sum. Specifically,

O.C.G.A. § 46-3A-8 provides as follows:

The approved or actual cost, whichever is less, of purchase of any

certified long-term power purchase shall be recovered in rates by

the utility, along with an additional sum as determined by the

commission to encourage such purchases. The commission shall

consider lost revenues, if any, changed risks, and an equitable

sharing of benefits between the utility and its retail customers.

As authorized by the statute, the Company is allowed an “additional sum” for purchased

power resources. When calculating an additional sum, the statue specifically requires that

the Commission consider lost revenues and an equitable sharing of benefits. Lost

revenues are calculated by considering the net income loss by the Company from

procuring the PPA instead of self building a project scaled to match the PPA.

The equitable sharing of benefits can be calculated by computing the average net benefits

to customers of the total resource portfolio. This calculation is done by comparing the

total PPA portfolio to the Company’s projected avoided energy and capacity forecasts.

The total portfolio of resources included in this Application provides a significant net

present value benefit for customers.

Although it would be appropriate for the Commission to rely on either lost revenues or

shared benefits to determine the appropriate additional sum, the Company proposes to

base the additional sum on an equitable sharing of the benefits. The Company would

propose that the additional sum be set at 20 percent of the levelized net savings from the

ASI Prime PPAs. The 80/20 level of sharing is a level of sharing with which the

Commission is familiar and utilizes. For example, the Commission currently allows

80/20 sharing on wholesale capacity sales revenues.

7. Conclusion

The 515.25 MW from the Winning Bidders’ PPAs were selected as the best offers in the

respective 2015 and 2016 ASI-Prime and 2015 ASI portfolios. The RFP process ensured

PUBLIC DISCLOSURE

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fair and equal treatment of all bidders. The IE and Commission Staff were involved

throughout the process from the development of the RFP Documents through the

evaluation of bids, selection of the Short List, and execution of the final PPAs. The use of

the IE website for questions and comments regarding this RFP further ensured that the

process was not only fair and equitable, but also transparent to all participants. The

evaluation process involved a thorough analysis of the submitted proposals for the 2015

and 2016 portfolios. The analysis was consistent and fair to all parties. The combination

of the projects identified for certification represent the best proposals for meeting the 425

MW ASI-Prime portfolio identified by the Commission in the Final IRP Order in 2013.

The combination of the projects identified for Commission approval represent the best

proposals for meeting the 70 MW ASI portfolio required by the Commission in its Order

in Docket No. 36325.

Therefore, the Company requests the following of the Commission to ensure cost-

effective electric service to its customers and the continued diversification of energy

resources in its portfolio:

(1) Grant a certificate of public convenience and necessity for the six ASI-Prime

PPAs;

(2) Grant a certificate or approve the four ASI PPAs;

(3) Grant the Company’s proposed treatment for recovery of the related costs as

described above; and

(4) Approve an Additional Sum as requested by the Company in Section 6.4.

PUBLIC DISCLOSURE

APPENDIX A

Electronic Copies of the ASI-Prime PPAs have been attached as separate PDF

files.

PUBLIC DISCLOSURE

APPENDIX B

Electronic Copies of the ASI PPAs have been attached as separate PDF files.