1710 Sixth Avenue North • P.O. Box 306 (35201) • Birmingham, AL 35203-2015 www.balch.com 

BALCH 

& BI NG HAM LL P 

BY ELECTRONIC FILING 

Walter L. Thomas, Jr., Secretary 

Alabama Public Service Commission 

RSA Union Building 

100 North Union Street, Suite 950 

Montgomery, Alabama 36104 

June 25, 2015 

RE: Petition for a Certificate of Convenience and Necessity 

Docket No. _____ _ 

Dear Mr. Thomas: 

DAN H. MCCRARY 

t: (205) 226-3409 

e: dmccrary@balch.com 

On behalf of Alabama Power Company, we are enclosing for filing a Petition for a Certificate of 

Convenience and Necessity. Consistent with the Commission's rules on e-filing, the original and one 

copy are being sent to your attention by overnight mail. Additionally, we have enclosed a confirmation 

copy, along with a self-addressed envelope for return to us. 

Should you have any questions or if there is anything further we need to do, please contact 

me. 

Very truly yours, 

g:~~~ DHM:eh 

cc: Commissioner Twinkle Andress Cavanaugh 

Commissioner Jeremy H. Oden 

Commissioner Chris "Chip" Beeker 

ALABAMA I rLORIDA I GEORGIA I MISSISSIPPI I WASHINGTON, DC 
Walter L. Thomas, Jr., Secretary 

June 25, 2015 

Page2 

Executive Director and 

Chief Administrative Law Judge 

The Honorable John A. Garner 

Director, Electricity Policy Division 

Mr. John D. Free 

Office of the Attorney General 

Ms. Olivia W. Martin 
BEFORE THE 

ALABAMA PUBLIC SERVICE COMMISSION 

ALABAMA POWER COMPANY, 

Petitioner, 

PETITION: For a certificate of convenience 

and necessity for the construction or 

acquisition of renewable energy and 

environmentally specialized generating 

resources and the acquisition of rights and the 

assumption of payment obligations under 

power purchase arrangements pertaining to 

renewable energy and environmentally 

specialized generating resources, together with 

all transmission facilities, fuel supply and 

transportation arrangements, appliances, 

appurtenances, equipment, acquisitions and 

commitments necessary for or incident thereto. 

Docket No. _____ _ 

TO THE ALABAMA PUBLIC SERVICE COMMISSION: 

Comes Petitioner, Alabama Power Company ("Alabama Power" or "Company"), and 

requests, pursuant to Alabama Code § 37-4-28, that the Commission issue an order in this 

proceeding granting a certificate of convenience and necessity. By the certificate, as described in 

the body of this Petition, and in future testimony presented in support herewith, the Commission 

would authorize the Company to constnJCt or acquire renewable energy and environmentally 

specialized generating resources and to acquire rights and assume payment obligations under 

power purchase arrangements ("PPAs") associated with renewable energy and environmentally 

specialized generating resources. 

1 In support of its Petition, the Company states as follows: 

1 For purposes of this Peti~ion, "renewable energy and environmentally specialized generating resources" 

means renewable energy resources as defined in Alabama Code § 40-18-1 (30) as well as other resources that 

promote environmental or other efficiencies, such as combined heat and power. 
1. Alabama Power is a corporation organized and existing under the laws of the 

State of Alabama that owns and operates electric generating plants and has other sources of 

supply of electric power, all of which are connected by transmission lines and facilities forming 

the Company's interconnected electrical system. Alabama Power is engaged as a public utility 

in the distribution and sale to the public of the electricity so produced and acquired by it, and 

such utility service is furnished by the Company to the public in a large section of the State. 

2. As the Commission is aware, the energy policies of the federal government and 

states throughout the nation increasingly have focused in recent years on the development and 

integration of "renewable" generation (e.g., solar, wind and biomass) and other environmentally 

specialized resources (e.g., combined heat and power) by utility companies as part of their 

electric supply portfolios. While the growth in state renewable portfolio standards (i.e., 

renewable resource targets predicated on a specified percentage of the utility's load) has 

plateaued in recent years, a number of jurisdictions have turned to mandated minimum levels of 

renewable energy supply. A notable example of this development is the neighboring state of 

Georgia, which through a suite of different programs is planning to add nearly 1000 megawatts 

("MW") of solar generation over the next several years. 2 

3. In tandem with this push for electric utilities to add renewable forms of generation 

to their supply, federal and state lawmakers continue to focus on the reduction of carbon, 

methane and other emissions, and the role that renewable generation can play in such efforts. 

One major rulemaking currently underway at the Environmental Protection Agency ("EPA") is 

its "Clean Power Plan", which would impose significant reductions on statewide carbon 

emissions. That rule, as proposed, assumes several forms of compliance alternatives, but one of 

2 This accumulation of approximately 1 ,000 MW of solar resources is the result of various actions of the 

Georgia Public Service Commission, with the largest portion being approved by Order issued July 17, 2013 in 

Docket No. 36489. 

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the primary options is the introduction of additional renewable generation as a means of 

achieving the contemplated carbon reductions. 

4. Although the Clean Power Plan remains a proposal, and the State of Alabama 

itself has not imposed any specific requirements relating to specific levels of renewable energy 

supply, the pervasiveness of these programs and policies nationally is beginning to influence the 

Company's existing and potential customers. By way of example, the Company is now 

receiving inquiries from existing and potential customers as to whether the Company can 

facilitate those customers' compliance with internal corporate goals relating to renewable energy 

consumption, carbon footprint reduction, or both. The ability of the Company to respond to 

customers in this respect helps promote the continued supply of cost effective electric service by 

protecting existing loads and enhancing the chances of the state's leaders attracting new industry 

and growing the job base for citizens. 

5. Similarly, the Company currently is witness to a number of its federal government 

customers becoming obligated-through Congressional actions, Executive Orders, and other 

internal agency directives-to shift their energy consumption to a specific level of renewable 

energy. Of note here are the bases serving the different branches of the Armed Services, a 

number of which are located throughout the Southeast. Over the last several years, Georgia3 and 

Florida4 utilities in close proximity to Alabama have announced plans to add a combined 240 

MW of solar generation in order to serve specific needs of certain of their respective military 

installations, and additional requests may be pending. With a new round of military base 

closures possible as federal officials discuss resuming the Base Realignment and Closure process 

3 See Orders of the Georgia Public Service Commission issued October 31, 2014 in Docket No. 24505 and 

December 18, 2014 in Docket No. 39028. 

4 See Order of the Florida Public Service Commission issued April 22, 2015 in Docket No. 150035-EI. 

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in the coming years, Alabama Power must be prepared to pursue whatever practical measures are 

available in order to help protect the state's bases, along with their associated jobs and economic 

infrastructure, and thereby avoid negative impacts to other customers' rates. 

6. With respect to renewable sources of supply, national policies continue to evolve, 

as do the corporate goals of our customers. In all situations, however, the Company is better 

positioned to serve its customers and promote the economic growth and sustainability of the 

State of Alabama when it is capable of acting proactively and expeditiously in its identification 

and procurement of cost-effective renewable generation to serve the needs of its customers. This 

is particularly so in situations where the need for action is prompted by new environmental 

regulations imposing stricter compliance requirements upon the Company. 

7. In view of this evolving political, regulatory and consumer landscape, the 

Company, as part of its reasonable and prudent service to the public and to address the needs of 

customers, seeks the requisite authority to secure rights and entitlement to capacity, energy and 

environmental attributes5 from renewable energy and environmentally specialized generating 

resources. Such authority would encompass the undertaking of preliminary surveys, plans and 

investigation related to the construction of such resources and the pursuit of power purchase 

arrangements, which in the Company's judgment, and under honest, efficient and economical 

management, represent cost-effective alternatives available to it. Through either new 

construction or acquisition of, or purchased power from, renewable and environmentally 

specialized generating resources, the Company seeks to better position itself to satisfy the needs 

of its customers and evolving national policies. 

5 In general, "environmental attributes" represent the non-power, environmental benefits of generating a 

certain quantity of energy from a renewable or otherwise environmentally specialized generation resource. 

Environmental attributes are the means through which the Company may: (i) comply with future legal requirements 

regarding renewable or environmentally specialized generation or (ii) assist customers in meeting their 

environmental needs (be they legal requirements or corporate or personal goals). 

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8. For these reasons, the Company requests through this Petition that the 

Commission grant a certificate of convenience and necessity that would facilitate the Company's 

ability to pursue new renewable energy and environmentally specialized generation resources in 

an efficient and timely manner. Specifically, Alabama Power is requesting a certificate that 

would authorize the Company, subject to guidelines outlined below, to secure up to five hundred 

(500) MW of capacity, whether through the construction or acquisition of renewable or 

environmentally specialized generating facilities not to exceed 80 MW in size,6 or the entry into 

PPAs relating to such facilities, or a combination of both. To the extent the Company has not 

secured resources up to the authorized 500 MW amount within a period of six (6) years from the 

date the certificate is granted, the unused authority would expire and the Company would be 

required to petition the Commission for certificate authority for additional resources. 7 

9. In accordance with the requirements of Alabama Code § 37-4-29, the Company 

would be required to exercise authority conferred by the certificate within one year from the 

grant thereof; otherwise, the certificate would become null and void. This requirement would be 

satisfied for the full authority granted by the certificate upon the taking of initial action by the 

Company under the certificate and provided that such initial action is within one year of the grant 

of the certificate. In circumstances involving the construction or acquisition of a new renewable 

or environmentally specialized resource, initial action would include activities commensurate 

with the commencement of construction of a road, line, system or works of the Company, or 

action otherwise consistent with Section 37-4-29 and previous direction by the Commission. In 

6 This size is consistent with the maximum size that a small power production facility may achieve and stili 

remain eligible for treatment as a qualifying facility under Part 292 of Title 18 of the Code of Federal Regulations. 

See 18 C.F.R. § 292.204. 

7 To be clear, the certificate authority associated with resources constructed and PPAs secured prior to the 

end of the six-year period would not expire; rather, only the unused certificate authority would expire. 

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situations involving a PPA, initial action likewise would include activities indicative of an 

exercise of the certificate authority (e.g., actual performance under the PPA or the 

commencement of interconnection efforts related to the resource(s) specified in the PPA). 

10. Authorization of the requested certificate will greatly enhance the ability of the 

Company to react quickly and efficiently to changing federal policies (whether in the form of 

new environmental regulations or in the form of tax-incentives), customer needs and evolving 

market conditions. Unlike traditional generating facilities, the size of renewable energy and 

environmentally specialized resources varies greatly and can represent a fraction of the size of a 

traditional generating facility. Pursuing individual certificates under such circumstances would 

not only be inefficient, but would also add unnecessary cost and avoidable delay to resource 

procurement efforts that are suited to more streamlined treatment. Accordingly, both the purpose 

of the certification requirement in Title 37 as well as administrative efficiency and the avoidance 

of waste generally are served through the granting of the requested certificate. Moreover, as the 

projects contemplated under this authority will have a close nexus with one or more individual 

customers, the proposed process facilitates the protection of their confidential and proprietary 

business information. The ability to protect such customer specific-information is an important 

key to the success of the process in terms of the preservation and growth of load and realizing the 

economic benefits associated with it. 

ll. With this in mind, a resource authorized under the requested certificate must 

satisfy the following criteria, as applicable: 

• The project is a qualifying project, in that: 

o The project constitutes a renewable energy or environmentally specialized 

generation resource (or a PPA conveying rights and entitlement to the 

capacity and output from such a resource). 

o The project size is 80 MW, or less. 

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o The project, considering all other authorized projects under this certificate, 

does not exceed the aggregate certificate authority of 500 MW. 

• The project is expected to result in a positive benefit for all customers, taking into 

account: 

o The expected cost of the project, as compared to the Company's projected 

avoided costs over the term of the project 

o Other positive benefits to customers projected over the term of the project, 

including: 

• The extent to which the project is expected to facilitate load growth or 

load retention, placing downward pressure on all rates. 

• The extent to which the project contributes to the Company's ability to 

comply with environmental or other governmental mandates. 

• The extent to which the project will include a customer-specific 

contribution, either for a specified period or for the term of the project. 

Each resource or PPA that meets these criteria, as verified by project details, supporting 

analyses, and other information presented by the Company to Commission Staff (and also to the 

Office of the Attorney General, as representative of the using and consuming public under 

Alabama Code§ 37-1-16), will be deemed certified pursuant to the authority requested by this 

Petition unless the Company is notified no later than thirty (30) days following the Company's 

submission of supporting analyses to the Commission Staff that the resource or PPA, in the form 

submitted, is disapproved. Satisfaction of these criteria, as reported by the Staff to the 

Commission, will assure that the Company's construction or procurement of the resource or PPA 

is just, reasonable and consistent with the public interest. 

12. Aided by the requested certificate, the Company will be able to more readily 

pursue opportunities for renewable and environmentally specialized generating resources as they 

manifest, whether through the development or acquisition of new projects or the entry into PPAs 

predicated on renewable or environmentally specialized resources that are already in existence or 

that are proposed to be built. The authority requested herein is not to the exclusion of future 

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decisions by the Company to pursue construction of larger, traditional resources, or other 

opportunities beyond the authority requested by tbis Petition, determined to be reasonable and 

prudent action to take as part of its service to the public. The authority requested by this Petition, 

however, will enhance the ability of the Company to adapt to changing energy policies and the 

evolving needs of customers, while positioning itself to continue the provision of reliable and 

economic service to the public. 

13. Upon the granting of the certificate of convenience and necessity as requested 

herein, it is the purpose of the Company to proceed with the exercise of its rights and the 

fulfillment of its commitments, and to use the capacity, energy and environmental attributes 

associated with renewable energy and environmentally specialized projects available thereunder 

consistent with the purposes described herein, with all associated costs related to such projects to 

be recovered pursuant to Rate ECR (Energy Cost Recovery), Rate CNP (Certificated New Plant) 

and Rate RSE (Rate Stabilization and Equalization), as applicable. 

WHEREFORE, Petitioner requests that this Commission, consistent with the provisions 

of Alabama Code § 37-4-28, and after a public hearing of all parties interested at a time and 

place fixed by the Commission, grant to the Company the above-described certificate of 

convenience and necessity, authorizing the Company to secure up to 500 MW of capacity, 

whether through the construction or acquisition of renewable or environmentally specialized 

generation facilities not to exceed 80 MW in size, or the entry into PPAs relating to these types 

of facilities, or a combination of both, together with all transmission facilities, fuel supply and 

transportation arrangements, appliances, appurtenances, equipment, acquisitions and 

commitments necessary for or incident thereto. 

8 
Dated this 25th day of June, 2015. 

BALCH & BINGHAM LLP 

Dan H. McCrary 

Scott B. Grover 

1710 Sixth Avenue North 

Birmingham, AL 35203 

Telephone: (205) 251-8100 

Fax: (205) 226-8798 

Attorneys for Petitioner 

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