During their August 6th meeting, the Hogansville City Council voted to withdraw from an electrical power sales agreement with the Southeastern Power Administration (SEPA) to purchase hydroelectric power that the city does not need.
The city entered into a 20-year agreement in 1996 with SEPA to purchase an allotment of hydroelectric power. The contract currently remains in effect because cities must give SEPA 25-months notice before pulling out of the agreement. Since 2016, Hogansville has continued to buy power under SEPA, even though the city already purchases more power than they can use.
SEPA hydroelectric power is currently the most cost-efficient electricity that the municipalities in Georgia can purchase, and it’s far cheaper than the coal and nuclear-generated power that Hogansville is also under contract to purchase.
Despite SEPA power being the cheapest electricity that the city can buy, it still makes little sense to continue to buy power that Hogansville does not need, advised City Manager David Milliron.
Traditionally, SEPA power has been cheap, but it isn’t the bargain it used to be given low market conditions, noted Milliron.
With nuclear plants Votgle 3 and 4 coming online soon, ending the SEPA agreement will allow Hogansville to get rid of some of the excess power when the additional nuclear costs take effect.
Opting out of SEPA is expected to reduce the city’s costs by about $171,550.
Mayor Bill Stankiewicz noted that it does sound a bit counterintuitive to sell the most cost-efficient power and keep the higher-cost energy, but the fact remains that the city has more power than it needs either way and that they cannot get out of decades-old contracts to buy the more expensive power.
Councilman Reginald Jackson suggested that the city look into making sure that the excess power that Hogansville is currently selling on the open market is being done so in the most efficient manner.
The council later unanimously voted to opt out of the SEPA hydroelectric power agreement. The agreement will remain in place until late 2020, per contract.
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