Electric cooperatives representing half the stake in a proposed coal-fired power plant in Middle Georgia have pulled out of the deal, electric membership corporations confirmed Tuesday.
The $2.1 billion Plant Washington project is being developed for a site eight miles north of Sandersville by Power4Georgians, which originally consisted of 10 partner EMCs. The two with the largest stakes, Jackson and GreyStone Power, have pulled out, as have the smaller Excelsior and Diverse Power.
All the cooperatives that have stepped away from the plant cited uncertainty about future federal regulation of carbon dioxide emissions from coal-fired plants, which seems eminent.
“Owning a coal plant at this point is more risk than we want to take,” said Gary Miller, president and CEO of GreyStone Power, which owned a 20 percent stake in the plant. “We believe in coal … but I can’t in good conscience invest for 30 years out without knowing the cost.”
Three of the EMCs, including GreyStone, actually voted to pull out of the partnership in January or February but remained in negotiations with Power4Georgians over how the process would work, said Dean Alford, whose company Allied Energy Services is developing Plant Washington. EMC officials confirmed this.
The four EMCs that withdrew represented 50 percent to 55 percent of the total stake in the plant, said Chip Stewart with Cookerly Public Relations, which represents Power4Georgians.
Alford said the defection of some of the partners would have no effect on the future of Plant Washington. The remaining six EMCs — including Washington EMC, Upson EMC and Central Georgia EMC — will not only have to shoulder a much larger share of the cost of the plant but also will receive larger shares of the power it produces, he said.
“I think in the end, it’s neither a surprise nor a problem for them,” Alford said. The 850 megawatts the plant would generate still won’t cover the demand the remaining cooperatives expect by 2016, he said.
Plant Washington, which would use 16,000 gallons of water a day, could potentially be the first new coal-fired power plant built in Georgia in a quarter century. Opponents say the loss of some EMCs from the partnership is a sign that the whole enterprise is unraveling.
“I’m really encouraged that it won’t be built now,” said Katherine Cummings, president of the Fall Line Alliance for Clean Energy. That group was founded last year to fight Plant Washington.
Cummings said Alford indicated at a public meeting in March that all the Power4Georgians partners were still on board, although he knew at least three had voted to withdraw.
“I believe that the project is in serious trouble,” said Stephen Smith, executive director of the Southern Alliance for Clean Energy. The group plans to file a lawsuit if Georgia issues environmental permits for the plant, he said.
But Smith said he remains concerned that Power4Georgians will stay alive just long enough to receive the state environmental permits, expected to be announced in draft form this summer. Then the enterprise could be sold at a larger profit, and another company could still build the plant, Smith said.
WHY PARTNERS ARE LEAVING
Most of the EMCs cited the uncertain regulatory climate as their chief reason for leaving Power4Georgians.
Jackson EMC, which serves more than 200,000 meters, voted to leave the consortium in February for this reason, said Bonnie Jones, director of public relations. So did Diverse Power, said Kathleen Boyd, assistant to the president/CEO of Diverse Power.
GreyStone, which has about 116,000 meters, voted to pull out in January, Miller said. Although GreyStone’s board continued talking with Power4Georgians about the possibility of keeping their existing equity in the project without investing further, the board eventually decided owning a coal plant would not be best for the EMC members, Miller said.
Miller said the “cap and trade” plan to limit carbon dioxide emissions, which seems to be favored by Congress and the Obama administration, could increase customers’ monthly bills by 12 percent to 30 percent. And potential mandates for buying renewable electricity could drive up costs even more, he said.
Excelsior EMC announced in its May 1 newsletter to members that it had pulled out of the Plant Washington project, said Greg Proctor, manager of member services. He did not respond to questions regarding when the vote was taken.
The Excelsior statement cited not only the regulatory uncertainty but also the current economic slowdown, “a reduction in member growth,” and current constraints on lending within the financial markets.
Several of the cooperatives that pulled out of the project indicated they might still be interested in purchasing power from Plant Washington if it is built.
But they may not need it so soon. Proctor at Excelsior said demand has dropped enough to extend the company’s timeline for adding capacity.
Smith speculated that some EMCs are leaving partly because of the criminal investigation of Cobb EMC. Cobb Energy, a for-profit company under contract to run Cobb EMC, owns the company that is developing Plant Washington.
According to The Associated Press, Cobb EMC’s principal officers are the subject of a state and local investigation related to theft and racketeering at the cooperative. “I think the fact that Cobb has so much controversy … has a real impact,” Smith said. “That’s just not the kind of business partner you want to be investing with.”
To contact writer S. Heather Duncan, call 744-4225.