The Brattle Group Projects $1.5 to $2.0 Trillion Investment Needed in the U.S. Electric Utility Industry by 2030

PRNewswire/ -- The U.S. utility industry will have to invest between $1.5 and $2.0 trillion between 2010 and 2030 to maintain current levels of reliable energy service for customers throughout the country, according to a new report issued today by The Brattle Group. The findings are detailed in "Transforming America's Power Industry: The Investment Challenge 2010-2030," presented today by Peter Fox-Penner, a principal of The Brattle Group, at the Edison Electric Institute's 43rd Financial Conference. The report was sponsored by the Edison Foundation.

"This study highlights the investment challenges confronting the power industry in the coming decades," said Dr. Fox-Penner. "The industry is facing enormous investment needs during a period of modest growth, high costs, and very substantial policy shifts," he explained.

All types of new generation capacity will be needed, including natural gas, coal, nuclear, and renewables. Nearly 40 gigawatts of new renewable capacity will be needed just to meet state requirements. Significantly, capital spending to upgrade distribution and transmission facilities nationwide may surpass investment in new generation, the study found. Spending on "smart grid" technologies to ramp up efficiency -- along with new power lines to integrate renewable electricity sources -- will account for much of that spending.

"The good news is that as a result of this very significant investment, our economy and utility customers will get more efficiency and control over their electricity use, lower-carbon generation, and a higher-technology, more resilient and reliable electric grid," Dr. Fox-Penner said.

The report, which follows highly publicized preliminary results introduced in April 2008 at an Edison Foundation conference, analyzes four possible scenarios that measure the impact of energy efficiency and demand response program implementation on investment needs and new plant construction. In the base case scenario, which does not account for new climate policies, the total investment needs are projected to reach $1.5 trillion. Implementation of a federal carbon policy would significantly increase the capital cost and change the mix of new generation capacity; for instance, a simplified model of one scenario with carbon controls would require an increase in total capital spending to $2 trillion.

Another key finding in the study is a large potential reduction in the need for new generation capacity, due to the faster than previously estimated implementation of energy efficiency and demand response programs. In the preliminary results, energy efficiency was estimated to potentially reduce new capacity by 17%. In the final results, the potential reduction in new capacity is projected to be approximately 38%. However, reductions in new required capacity will not correlate to an equal reduction in total investment due to the offsetting costs of implementing the efficiency programs.

"It is important to emphasize that while energy efficiency and demand response programs can significantly reduce the need for new generation capacity, they cannot eliminate the need for new power plants," Dr. Fox-Penner observed.

Marc Chupka and Robert Earle, principals of The Brattle Group, directed the study which is available at www.brattle.com and www.edisonfoundation.net.

The Brattle Group provides consulting services and expert testimony in economics and finance to corporations, law firms, and public agencies worldwide. Areas of expertise include antitrust and competition; electric power, natural gas, and petroleum; valuation and damages; and regulation and planning in network industries. For more information, visit www.brattle.com.

The Washington-based Edison Foundation is dedicated to bringing the benefits of electricity to families, businesses, and industries worldwide.

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Bolton to Speak at Executive Forum in Macon and Atlanta on Oct. 7

Former U. S. Ambassador to United Nations John Bolton will be the featured speaker at Mercer University's Executive Forum, presented by BB&T, on Tuesday, Oct. 7. Bolton will give a lunch presentation in Atlanta at The Capital City Club, 7 Harris Street, and a dinner presentation at 6:30 p.m. at The University Center on Mercer’s Macon campus.

Bolton served as United States permanent representative to the United Nations from August 2005 to December 2006. At the U.N., Bolton was an outspoken advocate of U.S. efforts to prevent Iran from acquiring a nuclear weapon, push Syria out of Lebanon and bring African peacekeepers into Somalia. Bolton helped shepherd a major sanction resolution against North Korea through the U.N. Security Council within days of Pyongyang's Oct. 9, 2006, nuclear test. Bolton and France's ambassador led the Security Council to approve a unanimous resolution to end the summer 2006 Hezbollah war on Israel. During his tenure at the United Nations, Bolton was an advocate for human rights. He arranged the Security Council's first deliberations on Burma's human rights abuses. Bolton invited actor George Clooney and Nobel laureate Elie Wiesel to brief the Security Council in September 2006 on Arab mass-murder of non-Arabs in Darfur, Sudan. He engineered the Security Council's approval of 22,500 U.N. peacekeepers in Darfur. Bolton pressured Sudan's government to accept these personnel atop the 7,000 African Union soldiers already on site.

Bolton is the author of “Surrender is Not an Option: Defending America at the U.N. and Abroad,” published in 2007.

Prior to his appointment at the U.N., Bolton served as under secretary of state for Arms Control and International Security from May 2001 to May 2005. Previously, Bolton was senior vice president of the American Enterprise Institute, a nonprofit public policy center. Bolton has spent many years of his career in public service. His previous positions in government include: assistant secretary for International Organization Affairs at the Department of State; assistant attorney general, Department of Justice; assistant administrator for Program and Policy Coordination, U.S. Agency for International Development; and general counsel, U.S. Agency for International Development. Bolton is also an attorney. Currently, he is a senior advisor for Kirkland & Ellis LLC with a focus on counseling clients on domestic and international issues in complex corporate litigation.

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News to Use in Fayetteville, Atlanta, Macon, Peachtree City and all of Georgia

Georgia Power Files Diverse Energy Plan

PRNewswire/ -- Georgia Power today asked the Georgia Public Service Commission (PSC) for approval of its updated integrated resource plan, including its proposal to build two additional nuclear generating units at the Vogtle Electric Generating Plant.

In an application filed with the PSC, the company said the nuclear units are expected to save customers between $2 billion and $6.5 billion over their operational life, when compared with similarly sized coal-fueled units over the same period, and $1 billion to $6.5 billion when compared with similarly sized natural gas fueled generators. The PSC is expected to rule on the proposal in March 2009.

Georgia Power also informed the PSC that it is in the final stages of evaluating the conversion of an older coal-fueled power plant, located near Albany, to burn renewable biomass wood. If approved, this plant would be one of the largest wood biomass plants in the U.S. Georgia Power expects to complete this analysis in late August.

"While we will continue to increase our emphasis on energy efficiency and renewable energy sources, we must also add large-scale base load generation to meet Georgia's growing energy needs," said Mike Garrett, Georgia Power president and CEO. "Since 2002, the price of natural gas has increased more than 400 percent. And the cost of coal has more than doubled in the past year. Additional nuclear energy capacity will help reduce our dependence on fossil fuels, at a time when fossil fuel prices are increasing significantly."

  The company's filing requests:

 -- The PSC's approval of an update to the company's "Integrated Resource
    Plan," an energy plan which outlines how the company will meet
    customers' demand and energy requirements in an economic and reliable
    manner.  The plan includes:
    -- The addition of Plant Vogtle units 3 and 4, which would provide
       1,102 megawatts each.
    -- Consideration to convert Plant Mitchell to burn renewable biomass,
       with details of the potential conversion to follow in a possible
       filing later this month.
    -- A solar research project, which could be expanded by 2011.
    -- Renewable energy, energy efficiency and demand response programs
       that could meet between 11 to 18 percent of future resource needs
       over the next 10 years.
    -- Expansion of the company's Green Energy program through a large
       volume renewable option and the addition of renewable energy
       credits.
    -- The PSC to allow inclusion of Construction Work in Progress (CWIP)
       for the two new Vogtle units in rate base, a regulatory treatment
       that would lower capital cost of the nuclear units by approximately
       30 percent.
    -- Georgia Power's portion of the cost of Vogtle units 3 and 4 is
       expected to be $6.4 billion without CWIP in rate base; however, with
       CWIP in rate base, Georgia Power's cost of the plant after it goes
       into service is estimated to be almost $2 billion - or about 30
       percent - lower.
 -- Approval of the company's recommendation to install environmental
    controls at Plants Branch and Yates.
 -- Approval of costs to assess new coal generation as an alternative to
    nuclear.
 -- Approval of a method to address cost adjustments associated with
    changes in commodity costs during construction.

Earlier this year, Georgia Power, acting for itself and for Plant Vogtle's co-owners (Oglethorpe Power, Municipal Electric Authority of Georgia [MEAG Power] and Dalton Utilities), entered into an Engineering, Procurement and Construction contract (EPC) with Westinghouse Electric Company LLC and The Shaw Group Inc.'s Power Group, for the development and construction of two AP1000 nuclear units.

Oglethorpe Power, MEAG Power, and Dalton Utilities informed Georgia Power July 2nd that they will maintain their maximum ownership shares in the new units: Oglethorpe Power, 30 percent; MEAG Power, 22.7 percent; and Dalton Utilities, 1.6 percent. Georgia Power's proportionate share is 45.7 percent.

While the final rate impacts of the proposed nuclear units will be determined by the PSC, the company estimates the typical Georgia Power customer, using 1,000 kilowatt-hours a month, would see a base rate increase of approximately $12 per month in 2018, when both units are fully operational. The rate impact is expected to decline over time.

However, if the PSC approves including CWIP for the new units in rate base, total rate increases required to cover the cost of the plant when it goes into service will be nearly 3 percent lower, and the cost of the plant when it goes into service will be approximately $2 billion - or 30 percent - lower. Because including CWIP in rate base would allow for small rate increases over a period of years leading to commercial operation, customers would also avoid large rate increases when the plant goes into service.

Georgia Power submitted its proposal to the Georgia Public Service Commission May 1, 2008 as a self-build option in connection with the company's plan to meet increased electric demand in 2016-2017. The company has worked with the Georgia PSC's Independent Evaluator and the Georgia PSC staff over the past few months to review the proposal. The review by the Georgia PSC staff will continue until a final certification decision is reached in March 2009.

If certified by the Georgia PSC and licensed by the Nuclear Regulatory Commission (NRC), the two Westinghouse AP1000 units, with a capacity of approximately 1,102 megawatts each, would be constructed at the Vogtle Electric Generating Plant site near Waynesboro, Georgia, and would be placed in service in 2016 and 2017, respectively.

Georgia Power is the largest subsidiary of The Southern Company (NYSE: SO) , one of the nation's largest generators of electricity. The company is an investor-owned, tax-paying utility with rates well below the national average. Georgia Power serves 2.3 million customers in all but four of Georgia's 159 counties.

Oglethorpe Power Corporation is a $4.9 billion power supply cooperative serving 38 consumer-owned EMCs in Georgia. These EMCs provide retail electric service to approximately 4.1 million Georgians. Oglethorpe Power is the nation's largest electric cooperative in assets, annual kilowatt-hour sales, and ultimate consumers served.

The Municipal Electric Authority of Georgia (MEAG Power) is a public generation and transmission organization providing power to 49 Georgia communities with annual electric sales of $736 million and 10.8 million megawatt-hours of delivered energy in 2007.

Dalton Utilities has operated as a public utility since 1889 and provides potable water, electrical, natural gas and wastewater treatment services to approximately 65,000 customers in the City of Dalton and portions of Whitfield, Murray, Gordon, Catoosa and Floyd counties. In 2003, Dalton Utilities launched OptiLink and now provides broadband, cable TV, telephone and internet services to residential and business customers.

Southern Nuclear, a subsidiary of Southern Company, operates Plant Vogtle's two existing nuclear power units for the plant owners. Southern Nuclear also operates the Edwin I. Hatch Nuclear Plant near Baxley, Ga. and the Joseph M. Farley Nuclear Plant near Dothan, Ala.

Cautionary Note Regarding Forward-Looking Statements:

Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the timing of various regulatory and other actions and plans for and estimated costs of new generation resources for Georgia Power. Southern Company and Georgia Power caution that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company and Georgia Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in the Annual Report on Form 10-K for the year ended Dec. 31, 2007 of Southern Company and Georgia Power, and subsequent securities filings, could cause results to differ materially from management expectations as suggested by such forward-looking information: regulatory approvals related to the potential Plant Vogtle expansion, including Georgia Public Service Commission and Nuclear Regulatory Commission approvals; effects of inflation; ability to control costs, including the cost and efficiency of construction labor, equipment and materials; interest rate fluctuations and financial market conditions and the results of financing efforts, including Southern Company's, Georgia Power's, and any of their subsidiaries' credit ratings and their impact on the cost of capital; the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, environmental laws including regulation of water quality and emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances, and also changes in tax and other laws and regulations to which Southern Company, Georgia Power and any of their subsidiaries are subject, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings or inquiries, including the pending EPA civil actions against certain Southern Company subsidiaries, FERC matters, IRS audits and Mirant-related matters; the effects, extent and timing of the entry of additional competition in the markets in which Southern Company's or Georgia Power's subsidiaries operate; variations in demand for electricity, including those relating to weather, the general economy, population and business growth (and declines), and the effects of energy conservation measures; available sources and costs of fuel; advances in technology; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and storm restoration cost recovery; potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company, Georgia Power, or any of their subsidiaries; the ability of counterparties of Southern Company or Georgia Power to make payments as and when due; the ability to obtain new short- and long-term contracts with neighboring utilities; the direct or indirect effect on Southern Company's or Georgia Power's business resulting from terrorist incidents and the threat of terrorist incidents; the ability of Southern Company, Georgia Power, and any of their subsidiaries to obtain additional generating capacity at competitive prices; catastrophic events such as fires, earthquakes, floods, hurricanes, droughts, pandemic health events such as an avian influenza or other similar occurrences; the direct or indirect effects on Southern Company's or Georgia Power's business resulting from incidents similar to the August 2003 power outage in the Northeast; and the effect of accounting pronouncements issued periodically by standard- setting bodies. Southern Company and Georgia Power expressly disclaim any obligation to update any forward-looking information.

Timeline for Iraq Drawdown Would Be Dangerous, Mullen Says

Setting a timeline for U.S. troop withdrawals from Iraq would be "dangerous," and troop reductions there should continue to be made based on security conditions on the ground, the nation's top military officer said today.

President Bush and Iraqi Prime Minister Nouri al-Maliki this week agreed to set a general "time horizon" for bringing more U.S. troops home from the war, Navy Adm. Mike Mullen said in an interview on "Fox News Sunday," but he added that to his knowledge, the agreement does not include specific dates. "I think the consequences could be very dangerous in that regard," he said.

The admiral stressed his view that troop-strength decisions must be conditions-based, but said he wants to see more U.S. forces come home. "I think the strategic goals of having timed horizons are ones that we all seek," he said, "because eventually we would like to see U.S. forces draw down and eventually all come home," he said.

Though he said he worries that a "rapid" movement of U.S. forces out of Iraq could create instability, Mullen said he found during a trip there two weeks ago that security conditions were better than he expected they would be, and that could mean more troops can come home if the trend continues.

"If conditions continue to improve, I would look to be able to make recommendations to President Bush in the fall to continue those reductions," Mullen said.

With the return home this month of the last "surge" brigade, commanders will spend the next several weeks assessing post-surge conditions in Iraq, including political and economic progress, before making their recommendations concerning future troop levels.

"We're engaged very much right now with the Iraqi people," Mullen said. "The Iraqi leadership is starting to generate the kind of political progress that we need to make, [and] the economy is starting to move in the right direction."

The admiral said he doesn't know if that means more troops could be home by the end of this administration in January. Logistics and other security details would factor into that, he explained.

"There is a physical challenge with respect to moving troops around," he said. "You just can't do it overnight."

Asked about recent struggles in Afghanistan, Mullen said safe havens across the border in Pakistan are allowing extremist groups free movement into the region.

"[It] is big challenge for all of us, and it's having an impact on our ability to move forward in Afghanistan," he said.

A "syndication" of various extremist and terrorist groups in the region is creating a more intense internal threat, the chairman said, and recent attacks have become more serious and sophisticated, such as the attack last week on an outpost in which nine U.S. soldiers were killed. However, he said, commanders on the ground say that forces are making progress and moving into villages and territories previously out of reach.

Mullen acknowledged that progress has been mixed, but he said he is "not concerned at all that we are losing at all in Afghanistan."

Concerning Iran, Mullen said he is "encouraged" by talks between Iran and the European Union yesterday in Geneva, Switzerland, and that the international community needs to continue its pressure on Iran's nuclear weapons development program.

"I fundamentally believe that they are on a path to achieve nuclear weapons in the future," he said. "I think that's a very destabilizing possibility in that part of the world. We don't need any more instability in that part of the world."

By Fred W. Baker III
American Forces Press Service

Nuclear Plant Co-Owners Move Forward

PRNewswire -- Co-owners of the Vogtle Electric Generating Plant today (July 3, 2008) announced their intent to maintain their proportionate share of ownership in the proposed Units 3 and 4. As co-owners of two existing units at Plant Vogtle, the utilities had the rights to participate in the new Vogtle units but were required to make a final commitment by July 2, 2008.

Earlier this year, Georgia Power, acting for itself and for Plant Vogtle's co-owners (Oglethorpe Power, Municipal Electric Authority of Georgia [MEAG Power] and Dalton Utilities), entered into an Engineering, Procurement and Construction contract (EPC) with Westinghouse Electric Company LLC and The Shaw Group Inc.'s Power Group, for the development and construction of two AP1000 nuclear units.

Oglethorpe Power, MEAG Power, and Dalton Utilities have informed Georgia Power that they will maintain the following existing ownership shares in the new units: Oglethorpe Power, 30 percent; MEAG Power, 22.7 percent; and Dalton Utilities, 1.6 percent. Georgia Power's proportionate share is 45.7 percent.

"Plant Vogtle's co-owners represent communities throughout Georgia, and we believe these collective decisions reflect the strong support our co-owners share in the proposed units," said Mike Garrett, Georgia Power president and CEO.

"Through our participation in this planned expansion of Plant Vogtle, Oglethorpe Power and our Member EMCs are taking action to help ensure that Georgians have the electricity they need for the future," said Tom Smith, president & CEO of Oglethorpe Power.

"The participants' level of cooperation and diligence as discussions moved forward was exemplary and underscores the value of joint action," states MEAG Power president and CEO, Bob Johnston. "They are to be congratulated for visionary leadership on behalf of the citizens they serve." Based upon contractual commitments made by 41 of the participants for which it provides wholesale electric power, MEAG Power will retain a 22.7 percent ownership interest in two new nuclear units.

"Although Dalton Utilities is the smallest co-owner participating in this project at 1.6 percent, our evaluation of all the factors that impact this project and our experience with Vogtle Units 1 and 2 lead us to conclude that it is an excellent investment in energy supply that will serve our customers well into the future," said Don Cope, Dalton Utilities president and CEO.

Georgia Power submitted its proposal to the Georgia Public Service Commission May 1, 2008 as a self-build option in connection with the company's plan to meet increased electric demand in 2016-2017. The company's self-build nuclear proposal will be reviewed by the Georgia PSC's Independent Evaluator before the company submits a final recommendation to the Georgia PSC on August 1, 2008 for approval. A final certification decision is expected in March 2009.

If certified by the Georgia PSC and licensed by the Nuclear Regulatory Commission (NRC), the two Westinghouse AP1000 units, with a capacity of 1,100 megawatts each, would be constructed at the Vogtle Electric Generating Plant site near Waynesboro, Georgia, and would be placed in service in 2016 and 2017, respectively.

Georgia Power is the largest subsidiary of The Southern Company (NYSE:SO) , one of the nation's largest generators of electricity. The company is an investor-owned, tax-paying utility with rates well below the national average. Georgia Power serves 2.3 million customers in all but four of Georgia's 159 counties.

Oglethorpe Power Corporation is a $4.9 billion power supply cooperative serving 38 consumer-owned EMCs in Georgia. These EMCs provide retail electric service to approximately 4.1 million Georgians. Oglethorpe Power is the nation's largest electric cooperative in assets, annual kilowatt-hour sales, and ultimate consumers served.

The Municipal Electric Authority of Georgia (MEAG Power) is a public generation and transmission organization providing power to 49 Georgia communities with annual electric sales of $736 million and 10.8 million megawatt-hours of delivered energy in 2007.

Dalton Utilities has operated as a public utility since 1889 and provides potable water, electrical, natural gas and wastewater treatment services to approximately 65,000 customers in the City of Dalton and portions of Whitfield, Murray, Gordon, Catoosa and Floyd counties. In 2003, Dalton Utilities launched OptiLink and now provides broadband, cable TV, telephone and internet services to residential and business customers.

Southern Nuclear, a subsidiary of Southern Company, operates Plant Vogtle's two existing nuclear power units for the plant owners. Southern Nuclear also operates the Edwin I. Hatch Nuclear Plant near Baxley, Ga. and the Joseph M. Farley Nuclear Plant near Dothan, Ala.

USS Georgia Flag Project Begins State Tour

Today Governor Sonny Perdue and the USS GEORGIA Return to Service (RTS) Committee announced the USS Georgia Flag Project, an effort to take the Georgia state flag across the entire state and into all 159 Georgia Counties. The flag is travelling across the state, so that everyone may participate in welcoming the USS Georgia home. March 28, the flag will reunite with the Submarine in Kings Bay.

“This is an exciting project because it allows all Georgians to take pride in our armed forces,” said Governor Sonny Perdue. “It is noteworthy that this tour allows all 159 Georgia counties to participate in welcoming the USS Georgia home.”

The submarine’s future was jeopardized in 1994 when the Nuclear Posture Review determined that the U.S. military had a surplus of Trident Submarines– 10 on the East Coast at Kings Bay and eight on the West Coast at Bangor, WA. The Nuclear Posture Review committee made a decision that four of the 18 submarines would be eliminated.

This sparked the U.S. Navy to keep in service the four submarines and convert them from strategic deterrence submarines to a precision strike and special operation force capable submarine.

“We have worked diligently with the 16 Georgia Regional Development Centers in planning this unprecedented project to take the Georgia State Flag on a trip across the entire state and into all 159 Georgia Counties,” said Don Giles (Captain, U.S. Navy Ret.), Navy League member and RTS Committee Flag Project Coordinator. “The response at scheduled meetings with County Commissioners in every county has been enthusiastic. To date, attendees at the first 40 counties ceremonial events reveal that true patriotism is alive in Georgia and that Georgians are truly supportive of the men and women who serve in our great Navy and in all our uniformed services.”

Giles has worked with the Georgia Regional Development Centers in planning the USS Georgia Flag Project. This flag is to be presented by Governor Perdue to the Commanding Officer of the USS GEORGIA at the Return to Service Ceremony in Kings Bay on March 28th, 2008.

Chairman of the committee and of the events surrounding the Return to Service (RTS), Sheila M. McNeill, is a past National President of the Navy League of the United States. Ms. McNeill said, “It is very rare to have a namesake ship home-ported in its home state. We are very pleased to have Governor Perdue as our Honorary Chairman. Our committee is working on a series of special events to show our appreciation for the dedicated service to our country by the men and women of the most powerful warship in the world, USS Georgia.”

The USS GEORGIA is 560 feet in length, displaces over 18,000 tons submerged and can carry a crew of 15 officers, 139 enlisted crew members and up to 66 Special Operations Forces for a sustained, long endurance deployment.