GEORGIA POWERS SMALL POWER PRODUCERS FUNDAMENTALS GEORGIA POWERS

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS What is Renewable Energy? Energy produced by: – – – solar, wind, biomass, landfill gas, ocean, • (including tidal, wave, current and thermal) – geothermal, – municipal solid waste, or – new hydroelectric generation capacity • Includes capacity achieved from increased efficiency or additions of new capacity at an existing hydroelectric project;

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS Georgia Power and Renewables • QF Contracts since 1982 – 1982 hydro – 2000 biomass • Approximately 55 MW capacity & energy contracts • Approximately 32 MW energy only contracts • New interest in Renewables – Higher Avoided Costs – Production Tax Credits

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS What is Green Energy? • Green Energy Program – Tariff Design approved in July 2003 • Voluntary Program • Not for profit • Self-funding – Non-participants unharmed – Program costs paid by participants – Any losses absorbed by shareholders

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS What is Green Energy? • Green Energy Program – Monthly Premium per 100 k. Wh block • Originally $5. 50 per block – Designed to recover costs of portfolio mix and program costs • Currently $4. 50 per block – Adjusted Fall 2006 after contracting with landfill gas to energy provider

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS What is Green Energy? • Green Energy Program – 12 month commitment • Customers can opt out each year – Minimum purchase amount determined by customer class

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS What is Green Energy? • • Residential: Small business: Medium business: * Large business: 1 block/month 2 blocks/month 25 blocks/month 400 blocks/month *Relaxed minimums for non-profit groups

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS What is Green Energy? • March 2004 resource criteria clarified – – – Solar thermal electric or photovoltaic (PV) energy Wind power Hydro resources certified by the Low Impact Hydropower Institute Landfill gas Solid, liquid, and gaseous forms of all woody waste biomass Excluding: • Black Liquor • Wood that has been coated with paints, plastics, or Formica • Wood that has been treated for preservation with materials containing halogens, chlorine or halide compounds like CCA-treated materials, or arsenic. (CCA = chromated copper arsenate); – Herbaceous agricultural waste and residue – Digester gas from poultry waste (excluding carcasses) – Sewage methane gas

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS What is Green Energy? • Only new resources – Begin operation on or after April 1, 2001 • New Renewable Energy Production Boundaries: – Georgia, Alabama, Florida, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee • Biomass Air Emissions Standards (NOx): – Online starting July 2003 through May 2005 • 1. 77 lbs/ MWH – Online June 2005 through May 2008 • 1. 5 lbs/ MWH • Must have portfolio mix of at least 2% solar or 15% wind and solar by year 3 of program

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS What is Green Energy? Source Typical Production Costs (¢ per k. Wh) Hydropower 4 -7 Landfill Methane 4 -8 Biomass 5 -10 Wind 4 -15 Solar >50

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS Georgia Power Green Energy Program • Original projection approximately 1% of customer base – About 19, 000 customers – About 37, 000 blocks • Initial source De. Kalb County LFGE project – Seminole Landfill – 3 MW facility (22, 500 MWh annually) – Online and delivering since October 2006 • Small solar supply from RNR tariff – Approximately 50 k. W • Currently reviewing solar and/or wind resource options

GEORGIA POWER’S SMALL POWER PRODUCERS FUNDAMENTALS Georgia Power Green Energy Program • Current Enrollment – 2, 477 customers – 4, 184 blocks – Approximately 22% of program supply