Dean Alford: Generating power: Part-ownership of coal plant will benefit Cobb EMC
by Dean Alford
Guest Columnist
February 15, 2011 12:00 AM | 2747 views | 6 6 comments | 11 11 recommendations | email to a friend | print
The Feb. 2 Marietta Daily Journal article “Execs mum on Cobb EMC’s stake in power plant” implied in both its headline and lead paragraph that somehow we have not been forthcoming with information about the ownership stake Cobb EMC will have in Plant Washington, an 850 megawatt power generation facility planned near Sandersville. At least four different representatives of Cobb EMC or Power4Georgians spoke with the writer and explained in detail how — at this time — it is impossible to know what percentage of Plant Washington will be owned by Cobb EMC and the other five EMCs in Power4Georgians. It is clear that this is a very complex issue that is easily misunderstood.

So let’s start from the beginning. Power4Georgians will take the ownership position in Plant Washington. Cobb EMC is an owner in Power4Georgians; very similar to the position it holds in Oglethorpe Power, whereby Oglethorpe has ownership in a number of energy facilities in the state such as Plant Hatch and Plant Vogtle. What is impossible to answer, because of the fluid nature of projects like this is; who else, potentially, would also be an owner in the project besides Power4Georgians? We cannot know that until the project is further down the road, until it is time to finance the plant and until we know everyone who is going to step forward and wants to participate either as a purchaser of power and/or as an investor in the plant. No one is being evasive or trying not to answer the question — the reality is, because of the complexities of projects of this nature, you simply don’t know.

Beyond that, the final ownership Cobb EMC will have in Power4Georgians will be a function of what percentage of the development costs it pays as the project moves forward, recognizing that percentage may or may not change, depending on who comes and who goes along the way.

I recognize that people would like to know a final figure of Cobb EMC’s involvement with Plant Washington. That exact figure is simply not known at this time, as the final business structure of the project continues to develop and evolve.

As part of the Power4Georgians consortium, our primary objective as it relates to Plant Washington is to obtain permits to build and operate the facility. After Power4Georgians receives a buildable permit, the project will move into its next phase of obtaining financing to build the plant and securing power purchase agreements for the electricity produced by the plant.

A utility can get power from the plant without being an owner and one can be an owner of the plant without getting power. In all likelihood, the ownership structure will change during this next phase — additional EMCs may join Power4Georgians, or the ownership pie may expand to include other utilities or investors. All of these options are on the table. Any of these scenarios will result in a change in the ownership formula.

It is standard throughout the utility industry for ownership percentages of such facilities to change throughout the process from announcement to operation. A good example is Southern Company’s highly advanced Integrated Gasification Combined Cycle project located near Meridian, Miss., announced several years ago and for which ground was broken in December. Recently another power provider, which had no prior involvement with the project, announced it was taking an ownership stake in the plant. Thus, Southern Company’s percentage of ownership in that project changed from what it was just the day before that agreement was completed.

In a more recent development, Duke Power, which announced the Lee Nuclear Power Station in South Carolina years ago, entered into a deal with JEA, the municipal utility, for Jacksonville, Fla. Under terms of the deal, JEA will pay $7.5 million for an option to purchase up to one fifth of the facility for $2 billion and use up to 440 megawatts of electricity when the plant goes online.

Compare that to a TOTAL price tag of $2.1 billion for Plant Washington, whose output will be 850 megawatts, and it’s simple to understand how the member EMCs in Power4Georgians are in such a favorable position.

As we attempted to explain to the MDJ, the myriad of factors enumerated above make any attempt to assign a percentage of the ownership stake in Plant Washington to Cobb EMC (or any of the other co-ops in Power4Georgians for that matter) pure speculation.

What is more important is that in uncertain economic times and a volatile energy marketplace, it is advantageous to participate in the development of a project like Plant Washington. At the end of the day, those participating in the development will be in a better financial position as it relates to the cost they pay for power from Plant Washington than those utilities that will enter the picture later. That is just the nature of developing energy projects in the world today.

Dean Alford is spokesman for Power4Georgians.
Comments
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anonymous
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February 19, 2011
re: "Coal is stupid, outdated, unnecessary and expensive. It is NOT unlimited, it is a fossil fuel. We have the ability to find better, safer, cheaper energy sources that will create more jobs for Georgians and will not destroy our future. " ---

followthe money, I agree with you on all you have said up until the above. You are just clueless when you speak of coal as a power generation source.

The reality is that Coal is abundant and, contrary to popular belief, clean - with the current scrubber technology employed on all coal fired power plants. As for safety, you are the first person I have ever heard claim coal to be unsafe.

Until we actually do find a better, "safer" energy source, if you are smart, you will be praying that more coal fired power plants start getting built in this country--and soon...else you are going to find that running your flat panel TVs or re-charging that new electric car you probably want to buy is going to cost you a whole lot more than you really know or are prepared to pay.

followthemoney
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February 17, 2011
1) RUS is not funding ANY MORE COAL fired power plants. The Feds aren't paying for it. Citi, Meryl and BOA all have corporate resolutions against coal and greenhouse gases. Banks aren't paying for it. It's the ratepayers that will pay to enrich Cobb EMC Directors and Dean Alford even further.

2) Dean Alford is the holder of $750,000 in preferred stock in Cobb Energy, the for-profit scheme led by Dwight Brown that is currently in court.

3) Alford got in trouble back in 1991 when he tried to set up a for-profit hospital corporation to replace the nonprofit Rockdale Hospital Authority. The Authority eventually won out in 2001-2. This is the same sort of nonprofit-for profit takeover Dean is trying to do with Cobb EMC.

Follow the money. This project does not make sense. Anyone with 1/2 a brain can tell you that. 150 coal plants have been cancelled across the nation. Coal is stupid, outdated, unnecessary and expensive. It is NOT unlimited, it is a fossil fuel. We have the ability to find better, safer, cheaper energy sources that will create more jobs for Georgians and will not destroy our future. Dean Alford and Dwight Brown and the entire board at Cobb EMC should go move to Saudi Arabia if they're so keen on fossil-fuels. Americans are better than such an idiotic, non-sensible proposal.
CoalisDirty
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February 17, 2011
Funny how Mr. Alford compares his coal plant to the MOST EXPENSIVE type of electricity - nuclear. Oglethorpe Power just bought two natural gas plants for 1/6th the price per kilowatt hour. Wouldn't Cobb EMC members rather buy cleaner, cheaper, already built sources of electricity?
anonymous
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February 15, 2011
People...contrary to what you are being told coal fired power is clean and it is cheap (because coal is plentiful). If you want to be able to afford in the future to power your new flat panel TVs...you best be bettin' on coal fired power now.
EMC Hostage
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February 15, 2011
This coal plant is nothing but a scam to enrich Dean Alford and Dwight Brown. Just like with Cobb Energy they are short on specifics because they do not want the membership to know the truth. Mr. Alford and Mr. Brown, Cobb EMC is not your personal piggy bank. Stop using it as such. I will be proposing an amendment to the Cobb EMC bylaws which will require approval by the vote of the membership for any contract that commits the EMC to more than a 3 year term. Several EMC's nationwide have similar provisions in their bylaws and this would prevent another Cobb Energy or coal plant scam. Obviously there are contracts that must be longer than 3 years. This way the membership can require disclosure on long term contracts before they vote.
Pat H
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February 15, 2011
A coal fired energy plant in the present environment of EPA penalties is a waste of membership money. Obama has promised to penalize coal plants harshly, and this project needs to be revised to a nuclear facility instead.

As long as the present CEO and board of directors refuse to resign and allow Cobb EMC to emerge again as a member owned facility with legitimately elected officials, further investment in this plant to be "owned" by Power4Georgians should be prevented. Power4Georgians should build the plant if they want to run the facility.
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