Alabama Power Responds to Corporate Customers’ Renewables Request

Alabama’s corporate customers are calling for growth in renewable generation to meet their headquarters’ renewables mandates.
Published: Thu 16 Jul 2015

We published an article last year about whether Alabama Power’s quick response time on social media channels is enough to keep their customer engaged and business afloat. [Engerati-Will Engagement Alone Help Utilities Keep Customers?] The author came to the conclusion that while customer engagement may gain trust and keep a few customers engaged in the future, the move to renewable generation and energy storage solutions may just win the day. And, it seems that the state’s largest electricity provider has taken the time to really listen to its customers and their needs-especially its corporate customers who are calling for an increase in renewable generation to satisfy their headquarters’ renewable mandates.

Alabama Power has made a formal request to the Alabama Public Service Commission (PSC) for the approval of up to 500MW of increased generation through renewable resources. If approved by the PSC, Alabama Power would work with interested customers to build its own renewable projects, or purchase energy from other renewable-generated sources.

Renewables plan to sustain and grow industry

The growing push from companies, particularly tech companies, to move toward renewable resources has been heard loud and clear by both Alabama Power and the communities seeking to recruit those businesses.  Companies are coming to recognise that renewables have the potential to improve corporate sustainability and potentially reduce energy costs. The Tennessee Valley Authority’s use of renewables has even been cited by some as a reason Google decided to build a data centre in the region of Alabama serviced by the federally-owned utility company. [Engerati-Google Sees Green]

“As a service provider, our focus is to make sure we are providing customers access to choices they want,” says Tony Smoke, Alabama Power vice president of marketing. “Through this plan, we are creating new customer options to sustain and grow industry in our state.”

The six-year renewable generation plan involves several projects, each accounting up to 80MW. The projects, totaling 500MW, represent four to five percent of the utility’s capacity. The 500MW of solar power is expected to power up to 100,000 homes during an hour of peak sun intensity on cloudless days.

According to Nick Sellers, Alabama Power vice president of regulatory and corporate affairs, the Public Service Commission does not want renewables to be subsidized by all of the utility’s customers and its latest plan will achieve this policy directive whilst also allowing for solar and new renewable energy projects which will provide economic benefits for customers.

Consumers demand growth in renewables

The formal request was made in response to a growing consumer demand, according to the utility. The company says its consumer base – including corporate customers – drove the recent decision to seek increased renewable generation.

“This programme was driven by conversations with customers looking to meet renewable mandates pushed down from their headquarters,” said Tony Smoke, Alabama Power vice president of marketing. “Our field representatives have worked hard to identify customers who could be impacted and, if this is approved, we will go directly to work with them to explore options.”

Mr Smoke says that the renewable generation programme would provide the utility with broad options to work with customers willing to pay for renewable costs, while allowing the utility to protect other customers from bearing additional costs.

To help keep prices low for participating customers, the idea is that excess energy from renewable sources could be sold for renewable energy credits or sold to other energy companies.

Alabama commits to renewable energy

Increased Environmental Protection Agency (EPA) regulations targeting coal-fired power plants have thrown Alabama Power's generation methods in the spotlight recently. While the company has agreed to convert some of its coal-fired units to natural gas, it maintains that coal will still form a part of the company’s generation plan in the foreseeable future.

Coupled with pressure from environmentally-conscious companies to expand renewable options has been a multitude of EPA mandates requiring a decrease in the use of coal-fired power plants.

Alabama Power alone has already spent more than US$3 billion to comply with the EPA’s increasing list of demands, causing the company to file for its first rate increase since 2011.

Conservation Alabama, an environmental lobbying group, has also commended Alabama Power's new renewables plan: “This is the beginning of what we would like to see as a long-term change in how Alabama produces and uses energy,” said Tammy Herrington, Executive Director of Conservation Alabama. “Alabama Power is signaling their commitment to renewable energy, and we look forward to working with them to expand this programme to make our state a leader in solar energy.”

This latest renewable plan will be added to Alabama Power’s renewable generation of 1,600MW of hydro resources in Alabama, and 404MW of wind generation from projects in Kansas and Oklahoma.