Sweeping federal legislation to overhaul the country's energy policies could cost Georgia tens of thousands of jobs, increase the costs of doing business and hamper its global effectiveness, local experts say.

The House of Representatives narrowly approved the American Clean Energy and Security Act last week by a 219-212 vote, and it faces a tough fight in the Senate this summer. The legislation aims to lower carbon dioxide emissions and encourage renewable energy sources. However, some critics charge the bill imposes an energy tax that would cost households more than $1,600 annually.

Business groups and utilities say they are not opposed to an energy plan that balances environmental and economic concerns. However, they warn current proposals could have a severe impact on the state - and may hurt the Southeast more than other parts of the country. 

"We're probably looking at probably losing 50,000-plus jobs in Georgia," says George Israel, president and CEO of the Georgia Chamber of Commerce. He believes the bill would increase costs for business and families, and "personal income would be hit about $5.5 billion." The legislation would increase costs for state and local governments by almost $170 million. Georgia's GDP (which totaled $329.5 billion in 2008) would be reduced by more than $4.5 billion, Israel says.

Steve Higginbottom, spokesperson for Southern Power, the parent of Georgia Power, says his company is still reviewing the changes made by the House on June 26. Analysis done before last week's vote indicates that over the next six years, electricity prices in Georgia would rise "about 20 percent above what they normally would be" under the legislation, he says. Those early studies also found a typical Georgia household would lose more than $2,000 in buying power annually and Georgia "could have 120,000 fewer jobs as a result of that proposed legislation," he says.

Israel says, "The sad part is: there is no assurance that it will make any real impact on global warming." He says competing countries in Asia have not agreed to specific reductions in their carbon emissions. Higher U.S. costs will increase the price of products, making them less competitive and sending more jobs overseas. "When we have this sort of thing hammering businesses in the middle of a recession, it's just going to put us into a deeper trough," he adds.

Recently, Israel says, he was visiting a family-owned manufacturing plant near Atlanta. "The owner told me, "I don't make any money; I open the doors every day because there are 220 families who depend on these jobs. If this thing passes, I cannot compete against China and India, and I'll have to close the doors.' That's what we're facing with this bill."

Additional concerns

The proposed legislation has improved somewhat as it worked its way through the House of Representatives, but major concerns remain, according to Bill Verner, vice president of government relations for Georgia EMC, the trade association for Georgia's 42 electric membership cooperatives.

Verner says it was a "tremendous achievement" when a House committee dropped the early provision that all electric utilities meet a 15 percent energy efficiency standard by 2025. Another provision - to generate 25 percent of all electricity through renewal sources - has been reduced to 20 percent. In addition, the final House bill stated 5 percent of that 20 percent improvement can be achieved through energy efficiency - and a state's governor can petition to have the energy efficiency component increased to 8 percent. An original five-cents-per-kilowatt-hour penalty for failure to comply with the standards has been halved to 2.5 cents, Verner says. While there have been improvements, he adds, "That should not imply it is now satisfactory."

Meeting the renewable generation goal will be tough, Verner says. Green Power EMC, the largest renewable program in Georgia, has a capacity to generate seven to nine megawatts of power. "That's not insignificant," he says. "But when you consider the system peak this summer will probably exceed 9,000 megawatts, that's only a fraction of 1 percent of the total." Oglethorpe Power also has a 300-megawatt biomass project. Verner notes the final House version allows utilities to count nuclear power as renewable energy, which will help Georgia EMC's members.

Despite those factors, he continues, Georgia's power usage is expected to double by 2025, so "the percentage of renewable we can deliver to the portfolio is going to exponentially decline. For all practical purposes, any utility that cannot comply with that standard is going to take the penalty or purchase credits that will support wind farms in the Midwest or solar farm development in the Southwest."

Also, the bill's small utility exemption for those selling sell less than four million megawatts of power annually has little benefit for the Atlanta region, Verner says. It helps "most of the country and rural Georgia," he adds, "but the metro area has two of the largest cooperatives in the country, Cobb and Jackson," which are already too large to qualify. "And 10 years from now, virtually every co-op in the metro area will exceed it."

Israel says the legislation will affect Georgia disproportionately because the region does not have access to many renewable energy sources. "We don't have enough wind; we don't get enough sunlight and sun intensity to make solar energy feasible. We don't have alternatives that our energy companies can get credits on, so that's going to hit us hard," he says.

Southern Company also wants "to make sure that customers in Georgia and throughout the Southeast do not pay more than customers in other parts of the country," Higginbottom says. "We want to make sure this is regionally balanced" on both carbon emissions and renewable energy use. "We don't think the bill in its current form went far enough to take that (regional differences) into account." He notes the South uses solar and wind generation like other parts of the country, "but we might be able to take advantage of biomass." For example, Georgia Power is converting Plant Mitchell near Albany from a coal-burning plant to a biomass facility that will generate power by burning logging waste.

On renewable and carbon dioxide standards, Verner says, "There are going to be winner and loser states and regions." In Georgia, for example, 40 percent of the cooperatives' energy comes from nuclear plants. "We're relatively better off than our neighbors in most of the Southeast," he says.

About 85 to 90 percent of Georgia's energy comes from coal-fired plants, Israel says, with nuclear and hydroelectric only accounting for a small portion of the total. More nuclear plant capacity is being added, but generation is "still a ways off."

Verner says a Senate committee has already passed its renewable energy proposal, while another committee expects to move forward on climate provisions next month. The Senate's renewable bill "is a less punitive version than what passed the House," he says, with a total renewable energy goal of 15 percent rather than 20 percent and a 2.1-cent non-compliance penalty rather than 2.5 cents.

Higginbottom says Southern Company's goal is to work with the Senate to minimize the economic impact of proposed act on its customers. "As much as possible, we want to remove the financial risk now associated with this bill," he says. "Southern Company does support a legislative approach to reducing carbon emissions below current levels. Our concern is ensuring it does not cause a negative economic impact to customers."

Verner says many observers expect a bill will emerge from Congress with a "renewable energy standard somewhere between Senate committee and House bill", with legislation signed by President Obama before he goes to Copenhagen for the next round of Kyoto talks. "Probably the climate legislation will be held until 2010," he adds. "We're telling people to stay informed and engage with elected officials. It's far from over."