Ga. utilities pull out of coal plant project that faces questions of corruption

We recently brought you a story about questions of corruption dogging a project to build a new coal-burning power plant in Georgia.

Since that story ran, four electric cooperatives that were involved in the project have withdrawn, knocking the number of participating utilities down to six. Among those that pulled out were the two companies with the biggest stake in the project.

Last month, state and local law enforcement officers raided the homes of top officials with Cobb Electric Membership Corp., a utility serving four counties in the suburban Atlanta area. The raid was part of a grand-jury investigation into charges of theft from the customer-owned company through a for-profit spin-off called Cobb Energy.

Among those under investigation is Dwight Brown, the CEO of both Cobb EMC and Cobb Energy. Brown is also the founder and manager of Power4Georgians, a consortium of electric cooperatives planning to build Plant Washington, an 850-megawatt coal-fired power plant in Georgia's Washington County.

Raising eyebrows is the fact that Power4Georgians hired to construct the $2.2 billion plant a company called Allied Energy Services -- a fully-owned subsidiary of Brown's Cobb Energy.

Brown denies any wrongdoing. But the watchdog Southern Alliance for Clean Energy notes that Allied Energy Services has no experience building coal-fired power plants and landed the deal to build Plant Washington without any competitive bidding process.

On May 15, a day after our story ran, Excelsior EMC announced at its annual meeting that it had ended its involvement in Power4Georgians and Plant Washington. Two days later, GreyStone Power also pulled out. Both cooperatives -- which had the largest stakes in the project -- cited market uncertainty related to federal climate regulation. Excelsior also pointed to weakened electricity demand due to the economic slowdown.

Since then, two more cooperatives that had been involved in the project -- Jackson EMC and Diverse Power -- also announced their withdrawal. The Macon Telegraph reports that GreyStone and two other EMCs actually voted to pull out earlier this year but were negotiating with Power4Georgians over how to proceed.

"Given the corruption of Cobb EMC leadership, investment in a giant new coal plant ought to be suspect as a get-rich-quick scheme rather than a benefit to ratepayers," said SACE Executive Director Stephen Smith. "Through a combination of energy efficiency initiatives and renewable energy sources Georgia can meet future energy demands without relying upon polluting, outdated technologies such as coal."

SACE says that as investors dwindle, so does the likelihood that the plant will be built. But Dean Alford, a spokesperson for Power4Georgians, disagrees. He told the Atlanta Journal-Constitution that "there is no doubt" that construction will proceed because of the demand for power.

Alford is a senior vice president with Cobb Energy who owns 30,000 preferred shares in the company. He also owns a real-estate firm with Brown.