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.