Companies contemplating coming to our state or expanding their present Georgia facilities look to reduce their total cost of operations. The economical and reliable wholesale electric power MEAG Power delivers to our local communities can play a significant part in helping businesses reach this goal.
MEAG Power strives to keep the price of our wholesale power very competitive. For over five years our price per kWh has been below 7.0 cents, which ranks us among the lowest-priced wholesale electricity providers in the region.
We do this by controlling or reducing expenses. For example, we monitor, renegotiate and implement new contracts with our suppliers to ensure we receive these services at current market rates. An example is an update to our long-term maintenance agreement for our natural gas combined cycle plant, where present value savings are estimated to be $35 million. Likewise, a new agreement concerning rail delivery of coal to Plant Wansley will reduce fuel costs for this facility.
We also keep costs competitive by continually monitoring the debt market to leverage low interest rates. The initial $2.7 billion funding we obtained for our capital requirements relating to the expansion at Plant Vogtle Units 3&4 was secured at a low 4.35 percent financing. Additionally, we have made the most of favorable government funding programs, including the federal loan guarantees offered by the U.S. Department of Energy to advance nuclear generation. And, we have arranged long-term Power Purchase Agreements with regional utilities that significantly enhance our ability to absorb the Plant Vogtle expansion.
Moreover, because MEAG Power has a diversified generation portfolio, including ownership in natural gas, nuclear and coal, along with hydro from the Southeastern Power Administration, we are able to switch to the most cost-effective fuel. Operational options between plants also mean we can cushion our system from market-price volatility and even take advantage of low market prices for energy by reducing generation and purchasing from the market.
Reliable electricity can mean a reduced risk of business interruption and is therefore imperative to industrial and commercial customers. To ensure we provide such service, MEAG Power maintains adequate reserve generation capacity. Additionally, we make the capital investments to ensure our generation plants meet or exceed all operating and emissions regulations. To date, we have invested over half a billion dollars in emission control technology. Our power lines are kept free from vegetation. Smart grid enhancements are implemented. And, we own and operate a transmission training center that works to keep our Participants’ utility professionals up to date on the latest equipment and technology. Most important, MEAG Power ensures that the key transmission lines and substations serving our Participant communities’ customers are not just adequate, but in many cases, redundant.
Also important to maintaining a reliable supply of electricity for our Participants’ customers is our financial well-being. MEAG Power has very favorable credit ratings with all three agencies (Fitch Ratings, Moody’s Investors Service and Standard & Poor’s) and has maintained this track record for many years. The agencies value our strong, conservative balance sheet and the take-or-pay general obligation pledge of our power sales contracts — contracts that in 2004 were extended for another 50 years.
In addition, MEAG Power is working to ensure reliability by helping develop the next generation of power industry skilled professionals. We are involved with several student-oriented organizations that promote technical education and careers in the energy sector. As a partner with Georgia Energy and Industrial Construction Consortium, we help develop workforce initiatives, including an energy curriculum for high schools and the state’s College and Career Academies, which prepare students for the 21st century workforce.
Finally, MEAG Power closely monitors regulatory and legislative activities that could threaten the electric system’s cost and reliability. We speak for our 49 local communities and often join forces with national public power associations to comment on pending rules, such as the Clean Power Plan, which could hinder productivity or limit generation.
As businesses contemplate relocating or expanding, MEAG Power’s emphasis on economical and reliable wholesale electricity should help them feel that their investment in our Participant communities is a wise investment today, and will be so in the future.
The weighted average retail rate of MEAG Power Participants is lower than the other major Georgia providers.
*Source: U.S. Energy Information Administration
1Facilitated through The Energy Authority