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Group Helps $13.2B Industry Sort Out All the Players

Energy Institute of Alabama Chairman Seth Hammett knows his way around the state’s power grid.

Energy Institute of Alabama Chairman Seth Hammett knows his way around the state’s power grid.

The energy industry has no lack of challenges, with a whack-a-mole array of new federal regulations, plunging natural gas prices, the closing of coal-fired generating plants and calls for more sustainable power from wind and solar sources.

Against that backdrop the Energy Institute of Alabama formed in April to combine the efforts of such players as the Tennessee Valley Authority, Alabama Municipal Electric Authority, Alabama Rural Electric Association, Alabama Power Co., the PowerSouth Energy Cooperative and the 36 or so cities in the state with their own electric distribution systems. The EIA is a Montgomery-based nonprofit.

Chosen to guide the effort was former Speaker of the House Seth Hammett, who served three terms in that capacity along with a stint in Gov. Robert Bentley’s cabinet as chief of staff. Hammett is also vice president of business development for PowerSouth Energy in his hometown of Andalusia.

The first task, Hammett says, was commissioning a study to fill in some blanks on the energy industry’s importance to the state. Conducted by Keivan Deravi, of Auburn University at Montgomery, this past summer using 2015 data, the study concluded the energy industry has a $13.2 billion total economic impact on the state, creating 124,000 jobs here along with $385 million in total tax revenue. Alabama has the third largest coal exporting seaport and ranks 16th in the nation for total energy production, coming in at no. 6 in electricity generation.

If things are going so well, why is the institute needed?

Energy is at a crossroads, according to EIA member Corey Tyree, of Southern Research. “Finding economical and commonsense ways to advance the industry is vital to our future, and keeping informed in areas such as R&D is critical.”

On the political side, the Environmental Protection Agency has pushed a wide range of new clean air measures with hefty pricetags, though President-Elect Donald Trump is expected to change its direction. Even so, new technology will mean new challenges for the industry.

“In terms of wind and solar, we’re in favor of all of the above as sources to produce electricity,” Hammett says. “We like nuclear being part of the mix, coal, natural gas. We know we can’t predict the future, but we hope to at least forecast what the growth is going to be, try to drive growth by recruiting business to Alabama, and then have enough electricity for that plus a 15 percent reserve.”

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