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  1. Green Energy Program Redesign Wilson Mallard – Georgia Power Company NARUC Staff Subcommittee on Accounting and Finance Fall Meeting October 13, 2008

  2. Green Energy • Background and History • Customer Needs • Program Redesign • New Green Energy Program Implementation

  3. Background

  4. History of Green Energy at Georgia Power • Proposed by GPC in IRP in 2001 • Green Program approved in 2003 • Landfill Gas resource contract signed in 2005 • GPC purchases solar energy through the RNR tariff • Customer Billing began in October 2006 • Green-e certification received in March of 2008 • Renewable Resource Action Plan (August 2007) • Currently 90% subscribed – over 4,000 customers and 16,000 blocks sold

  5. Customer Needs

  6. Georgia Power listened to all Stakeholders – Regulators, Customers, Environmental Groups • Large Customers need low cost Renewable Energy • GPC filed Renewable Resource Action Plan (August 2007) • First Stakeholder Meeting to review preliminary design (January 2008) • Written Comments from Stakeholders (February 2008) • GPC considered the Stakeholder comments and modified the proposed design • Second Stakeholder meeting held in June 2008

  7. Large Volume Renewable Energy Design Requirements • Satisfy Commercial and Industrial customer need for renewable energy at a competitive price • Increase overall renewable energy purchases and production in Georgia • “Green-e” certification • Protect the viability of existing Green Energy Program • Program designed to be financially self-sufficient • Program must regulatory specifications

  8. Redesign of the Green Energy Tariff

  9. Green Energy Program Redesign • The Green Energy Tariff was redesigned to provide several options for customers: • Premium Green Energy - $4.50 per block, retains 2 % solar resource requirement • Green Energy - $3.50 per block, no solar or wind resource requirement • Large Volume Purchase Option – available on a customer specific basis after the customer has purchased 400 blocks of Green Energy • Special Events Purchase Option – allows for one-time purchases of Green Energy for events such as concerts, sporting events, conventions, etc.

  10. Green EnergyProgram Redesign • Premium Green Energy - $4.50 per block, keeps 2 % solar resource requirement • For customers who choose to pay more for solar resources • 2 % solar resource will be supplied by purchases through RNR-3 (Renewable and Non-Renewable Resources) • Existing customers can choose to select Premium Green Energy or stay on Green Energy • Additional Premium Green Energy will be made available as more solar is acquired through RNR-3

  11. Green Energy Program Redesign • Green Energy – lower price to $3.50 per block • Supply from the Seminole landfill and other approved Georgia based renewable generators • Solar/Wind resource will not be required • Large Volume customers required to purchase at least the minimum number of Green Energy blocks before the Large Volume option becomes available

  12. Green EnergyProgram Redesign • Large Volume Purchase Option – Customer specific contract terms • The demand initially will be met through purchases of Green-e certified Renewable Energy Credits (RECs) • Customers must buy 400 blocks of the Green Energy tariff before they qualify to purchase Large Volume Green • Batch procurement and contracting process will minimize costs and risk

  13. Large Volume Purchase OptionProcurement and Contracting Process • Customers enroll (for the option to participate) • Company secures supply and pricing • Company notifies participants of offer, e.g., • Customers make purchases (i.e., sign contracts) • Company aggregates customer purchases • Company purchases RECs, if necessary • Company provides renewable energy benefits and bill to customers Large Volume Renewable Energy Offer ( Sept. 1, 2008) Total Monthly kWhs Available: 10,000,000 Price: X ¢/kWh Minimum Monthly kWh Purchase: 50,000 Contract Term 3 years , A vailable while supplies last or until Sept. 3 0 , 2009 whichever comes first.

  14. Large Volume Purchase Option Procurement and Contracting Process GPC- Owned Renewables Retail Customers 4 6 REC Market 2 RECs Needed Contract Request for REC Quote 2 1 6 REC Quote Enrollment 3 REC Contract Georgia Power LVRE Offer 5 7 RECs Needed Renewable Energy Benefits Bill

  15. Green EnergyProgram Redesign • Special EventsPurchase Option • Many customers are seeking Green Energy for special events • One time purchase fits customer need • Customers will purchase energy through the approved tariff • One year minimum on tariff requirement will be waived • Tariff applicability language will ensure only approved special events qualify for the Special Events Purchase Option

  16. Green Energy Program RedesignSummary • One program with several options • Goal to maintain Green-e certification • Program designed to break even • All fuel related expenses will be recovered through the Fuel Cost Recovery Clause • All marketing and administrative expenses will be covered by Green Energy Premiums • PSC will monitor the Program through quarterly reports • If program is under recovered, premiums will be raised; if revenues exceed expenses, additional resources will be procured or prices will be reduced

  17. What’s Next?

  18. Green EnergyProgram Implementation • Contact all customers within 30 days • Customers must choose an option • Produce brochures and sales kits • Marketing messages differ for each option • Procure REC’s for Large Volume customers • From Company owned resources or REC market • Update Billing System • Significant work needed to bill all options • Update Accounting and Tracking • Expenses and revenues for each option must be tracked • Design and produce updated quarterly reports • Public Service Commission oversight is essential

  19. Discussion and Comments