If the old adage holds true, there is strength in numbers. PowerSouth Energy Cooperative, Baldwin EMC’s wholesale power supplier, expects to soon be reaping the benefits of this sentiment, as the co-op enters into a Coordinated Planning and Operations Agreement (CPO) with Alabama Power.
After a long period of studying the benefits of a CPO, PowerSouth’s management team decided there was much to be gained from pooling resources with Alabama Power. This will allow the co-op to have access to a broader depth of generation resources, which will not only improve reliability of its power supply, but also its cost-effectiveness.
Power pooling also adds an additional layer of diversity to the power generation resources available for co-ops like Baldwin EMC. The CPO gives PowerSouth access to Alabama Power’s hydroelectric, coal, natural gas, and solar resources, as well as the resources of Southern Company’s larger pool, such as Georgia Power’s nuclear facilities.
To be clear, this isn’t a corporate merger. PowerSouth and Alabama Power will still exist as two separate companies, and PowerSouth will still continue to own, operate and maintain its own assets. However, the joint pool of resources with Alabama Power, which is a party to the larger Southern Company energy pool, will allow PowerSouth to sell surplus energy, as well as buy energy when it’s cheaper than generating power using its own resources.
“During times when pool participants have available energy that is cheaper than PowerSouth’s, the cooperative will be able to purchase more economical energy from Alabama Power,” said Vice President of Power Supply Ron Graham. Likewise, when PowerSouth is producing cheaper power and has excess energy after covering its load, Alabama Power can buy it.
“It’s all about optimization – taking advantage of available economies. This ability to purchase and sell electricity will put downward pressure on everyone’s costs, benefitting PowerSouth, its members and end-use consumers,” said Graham.
Having access to pooled resources also makes it easier for PowerSouth to meet the increasing demand for electricity from its member co-ops like Baldwin EMC.
The 10-year agreement, which started in September, will seamlessly provide reliable, economical power for PowerSouth members, like Baldwin EMC, for years to come.