Georgia Power files diverse energy plan

Atlanta, GA, Aug. 7, 2008 — Georgia Power 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 are:

* 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.

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