Georgia Power asks to increase customer fuel charge

By David Markiewicz

The Atlanta Journal-Constitution

The typical Georgia Power residential customer would pay $6.98 more each month in fuel charges if a request by the electric utility is approved by the Georgia Public Service Commission.

The proposed increase would not be the biggest ever, but it would be well above the $2.82 the company was granted  in its last fuel rate case filing in 2008.

The hike, which would take effect April 1, would raise the typical customer's average total monthly bill, including the base rate and the fuel charge, to $109.42.

Of that monthly bill, about 42 percent would be attributable to fuel costs.

Fuel charges are used to pay for the coal, natural gas and nuclear fuel that utilities use to produce power. Utilities are entitled under law to recover those costs. They anticipate future power needs and the cost to produce the necessary power, and then assess fuel charges to cover those expected costs.

Georgia Power is asking for $3.9 billion to cover its costs of fuel for the 14-month period from April 2010 to May 2011, a $470 million increase over its current fuel cost charge. It filed its request Tuesday.

The company also would collect $642 million in fuel costs it incurred during the last 15-month period but did not recover through its fuel charge because it underestimated fuel costs during that time  in its projections.

The utility said the cost of coal was much higher than projected for 2008, accounting for the low estimate.

For the next rate period, the company is projecting an increase in the cost of coal, its prime fuel, but also a decrease in the cost of natural gas, another fuel that it uses.

Georgia Power's fuel usage projections have been off the mark in recent years.  Ann Daiss, vice president, comptroller and chief accounting officer for Georgia Power,  said the company had encountered "a lot of volatility since the last case."

The new filing was delayed at the request of Georgia Power from last spring. The company said it wanted to spare customers, hard hit by the effects of the economic recession, an increase in their bills.

The PSC is to hold public hearings on Georgia Power's fuel case filing in February. A final decision is expected in March.