1710 S ixth Avenue North •P.O
.B ox 306 (35201) • Birmingham,AL35203 -2015 www.ba lch
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BY ELECTRONIC FILING WalterL. 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
.M C

CRARY t: (205) 226-3409 e: dmccrary@balch.com

On behalf ofAlabama Power Company, we are enclosing forfiling 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 sentto yourattention 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. Verytruly yours,

# g:~~~ DHM:eh cc: CommissionerTwinkle Andress Cavanaugh Commissioner Jeremy H. Oden Commissioner Chris "Chip" Beeker

ALABAMA I rLORIDA I GEORGIA I MISSISSIPPI I WASHINGTON, DCWalter L. Thomas, Jr., Secretary June 25, 2015 Page2

Executive Director and ChiefAdministrative Law Judge The Honorable John A. Garner Director, Electricity Policy Division Mr. John D. Free Office ofthe Attorney General Ms. Olivia W. MartinBEFORETHE 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 orincidentthereto.

DocketNo.
_____ _
TO THEALABAMA PUBLIC SERVICECOMMISSION: 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 acertificateofconvenience and necessity. By the certificate, as described in the body ofthis 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 generatingresources. 1 In support ofits Petition, the Company states as follows:

1For purposes ofthis**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 ofelectric power, all ofwhich 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 Companyto the public in a large section ofthe 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 ofjurisdictions 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 ofdifferent programs is planning to add nearly 1000 megawatts ("MW") ofsolar generation overthe next several years.2 3. In tandem with this push for electric utilities to add renewable forms ofgeneration 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 ofcompliance alternatives, but one of

2 This accumulation ofapproximately 1 ,000MW ofsolar resources is the result ofvarious actions ofthe GeorgiaPublic Service Commission, with the largest portion being approved by Order issued July 17, 2013 in DocketNo. 36489.


### 2the primary options is the introduction of additional renewable generation as a means of achieving the contemplatedcarbonreductions. 4. Although the Clean Power Plan remains a proposal, and the State of Alabama itselfhas not imposed any specific requirements relating to specific levels ofrenewable energy supply, the pervasiveness ofthese 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 ofcost effective electric service by protecting existing loads and enhancing the chances ofthe state's leaders attracting new industry and growing thejobbase for citizens. 5. Similarly, the Company currentlyis witness to a number ofits 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 ofwhich are located throughout the Southeast. Overthe 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 ofthe Georgia Public Service Commission issued October31, 2014 in Docket No. 24505 and December 18, 2014 in Docket No. 39028. 4 See Orderofthe FloridaPublic Service Commission issued April 22, 2015 in DocketNo. 150035-EI. 3in the coming years, AlabamaPower mustbeprepared to pursue whateverpractical measures are available in order to help protect the state's bases, along with their associatedjobs 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 ofAlabama when it is capable of acting proactively and expeditiously in its identification and procurement ofcost-effective renewable generation to serve the needs ofits customers. This is particularly so in situations where the need for action is prompted by new environmental regulations imposing stricter compliancerequirements upon the Company. 7. In view of this evolving political, regulatory and consumer landscape, the Company, as part ofits 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 itselfto satisfy the needs ofits 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).
48. For these reasons, the Company requests through this Petition that the Commission grant a certificate ofconvenience and necessity that wouldfacilitate 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, subjectto 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 ofboth. To the extent the Company has not secured resources up to the authorized 500 MW amount within aperiod ofsix (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 ofthe grant ofthe 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 asmall power production facility may achieve and stili remain eligible for treatment as a qualifying facility under Part 292 ofTitle 18 ofthe Code ofFederal 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 ofthe six-year period would not expire; rather, only the unused certificate authority would expire.
5situations 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 commencementofinterconnectionefforts related to the resource(s) specifiedin 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 ofthe size ofa 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 procurementefforts that are suitedto more streamlined treatment. Accordingly, both the purpose ofthe certificationrequirement in Title 37 as well as administrative efficiency and the avoidance ofwaste generally are served through the granting ofthe 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 ofthe process in terms ofthe preservation and growth ofload and realizing the economic benefits associatedwithit. ll. With this in mind, a resource authorized under the requested certificate must satisfy the following criteria, as applicable:
• Theprojectis 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 outputfrom such aresource). o Theproject size is 80 MW, orless.

6o The project, considering all other authorizedprojects underthis certificate, does not exceedthe aggregate certificate authority of500 MW.

• Theprojectis expected to result in a positivebenefit for all customers, taking into account: o The expected cost ofthe project, as compared to the Company's projected avoided costs overthe term ofthe project o Otherpositive benefits to customers projected overthe term ofthe project, including: • The extent to which the project is expected to facilitate load growth or load retention, placing downwardpressure on all rates. • The extentto which the projectcontributes to the Company's ability to complywith environmental orothergovernmental mandates. • The extent to which the project will include a customer-specific contribution, eitherfor a specified period orfor the term oftheproject. 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 ofsupporting analyses to the Commission Staffthat the resource orPPA, in the form submitted, is disapproved. Satisfaction of these criteria, as reported by the Staff to the Commission, will assure thatthe Company's construction orprocurementofthe resource orPPA isjust,reasonable and consistentwith thepublicinterest. 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 ofnew projects orthe entry into PPAs predicated onrenewable orenvironmentally 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

7decisions 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 ofits service to thepublic. The authority requested by this Petition, however, will enhance the ability ofthe 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 recoveredpursuant 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 offacilities, or a combination of both, together with all transmission facilities, fuel supply and transportation arrangements, appliances, appurtenances, equipment, acquisitions and commitments necessary for or incidentthereto.

8Dated t his 25thday ofJune, 2015.

BALCH & BINGHAMLLP Dan H. McCrary ScottB. Grover 1710 Sixth Avenue North Birmingham,AL35203 Telephone: (205) 251-8100 Fax: (205) 226-8798 Attorneys forPetitioner

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