City’s future may lie in hands of Ga. Power CEO

By Maria Saporta
Atlanta Business Chronicle
Friday, August 7, 2009

At 9 a.m. on July 23, the phone rang in Mike Garrett’s office.

It was Gov. Sonny Perdue. Would Garrett, president and CEO of Georgia Power Co., be willing to serve as the “quarterback” of the state’s efforts to get congressional authorization to use Lake Lanier for drinking water and help resolve the dispute between Georgia, Alabama and Florida over water allocation?

Garrett had little time to think it over. Perdue already had invited 130 leaders in business and government to the Governor’s Mansion at 10 a.m. that morning, and he wanted to announce that Garrett was leading the team.

So Garrett accepted — a move that has generated a great deal of conversation, intrigue and debate about the role of Georgia Power, and its parent, Southern Co., in resolving the tri-state tug of war — a dispute that has lasted nearly two decades.

In an exclusive interview on Aug. 3, Garrett spoke openly about his multi-layered roles in Georgia’s uphill efforts to reach an agreement with Alabama and Florida and secure the authorization to use Lake Lanier for drinking water.

“I was a logical choice from the business community,” said Garrett, who has been discussing water issues with Perdue since they first met.

“I’m somebody who has experience with water issues, and I work for a company with a statewide presence.”

Garrett also holds two other pivotal roles in the state. He is chairman of the Georgia Chamber of Commerce and he chairs the Georgia Department of Economic Development.

Georgia experienced a serious setback on July 17 when a federal judge ruled that metro Atlanta was not legally entitled to Lake Lanier’s water. He gave the three states up to three years to reach an agreement, either among themselves or through Congress.

By naming Garrett to quarterback Georgia’s efforts, some observers believe Perdue made one of the most brilliant strategic moves of his administration.

Southern Co. not only owns Georgia Power, but Alabama Power and Gulf Power along the Florida Panhandle. Could Garrett’s help orchestrate some kind of pact between the utilities and the states?

Even Garrett acknowledged that he might be in a unique role to help bring the parties together.

“With the in-state political contacts that each one of the operating companies has, we can be helpful, even to the point of being a catalyst to get some kind of agreement between the states,” Garrett said. “But don’t expect to see the Southern Co. take a position or dictate any one of its companies to take a position that’s detrimental to the region.”

Others, however, expressed concern over Garrett’s appointment because Georgia Power is the state’s largest water user, and they fear the utility could place its own business interests ahead of Georgia’s. For the record, Georgia Power does not use water from Lake Lanier. But the company has a major stake in metro Atlanta’s continued economic growth for its own business prospects.

Garrett also was criticized by Alabama Gov. Bob Riley and members of Alabama’s congressional delegation for leading Georgia’s efforts because they felt it would give the Peach State an unfair advantage within Southern Co.

Yet Garrett is no stranger in Alabama. From 1990 to 2001, Garrett worked at Alabama Power and served as executive vice president of government affairs, a position that put him right in the center of the water wars.

Historically, Alabama Power has taken a much more aggressive role in the water disputes than has Georgia Power. It relies heavily on hydropower, and more importantly, it needs water from Lake Lanier to help cool its Plant Farley nuclear power plant.

Because of his tenure in Alabama, Garrett didn’t expect his new Georgia role would generate such criticism.

“I was surprised because all those folks know me from my days in Alabama,” Garrett said. “What bothered me most about it was their accusation that Southern Co. was taking a position by me agreeing to do this. Nothing could be further from the truth.”

Instead, Garrett said he didn’t ask Southern Co. CEO David Ratcliffe whether he should take the role. He only informed his boss after saying “yes” to Perdue.

“Ratcliffe was fine,” Garrett said. “He’s allowed Alabama Power for years to be engaged in the process so why wouldn’t he be supportive of me doing this for the state of Georgia.”

The CEOs of Southern’s operating companies have a great deal of autonomy in how they work within their individual states.

By the way, Garrett said he called his counterparts in Alabama and Gulf Power to tell them he would be leading the Georgia team. “They were very supportive,” Garrett said. “And not one of them lost their composure.”

Garrett said Perdue has a multi-pronged strategy to resolve this issue. The first will be to file an appeal to the federal judge’s decision. The second will be to continue to encourage conservation.

Third will be to explore new sources of water, including the building of new reservoirs or converting abandoned rock quarries into reservoirs.

Garrett agreed to quarterback the two other efforts — seeking an agreement with Alabama and Florida on two now-expired water compacts: one for the Appalachicola, Chattahoochee and Flint river basin (ACF); and the other for the Alabama, Coosa and Tallapoosa river basin; and securing the authorization from Congress.

Those two efforts go hand-in-hand, because if the three states agree, then congressional approval will be far more likely.

Garrett is fairly optimistic that these efforts will be successful while previous ones have failed. He would like to see the three governors meet and agree to put together small negotiating teams from each state to hammer out the details.

“We’ve been at this for 18 to 19 years. A lot of work has been done. And a lot of the folks are still in place,” Garrett said. “The main thing is for everybody to stand down on the rhetoric and see what can be accomplished through these negotiations. I think we will be able to tell pretty soon if we can come to an agreement.”

Garrett believes the state will know by late fall whether an agreement is possible.

“If we all go back and look at water allocation agreements that have been agreed to in the past, they will clearly see there’s a solution in the middle of this and that it can be resolved,” he said.

Part of Garrett’s task will be to convince Alabama and Florida that it’s in their best interest to reach an agreement with Georgia.

“Some may say this is an economic development issue for Georgia, but it’s an economic development issue for the entire Southeast region,” Garrett said. “I don’t think Alabama and Florida can sit there and think that it’s just a negative economic development issue for Georgia. ”