PSC staff, Georgia Power strike deal on revenue plan

By David Markiewicz

The Atlanta Journal-Constitution

Georgia Power’s quest to use $324 million in ratepayer revenue to bolster its bottom line -- rather than seek a rate hike -- took a step forward with an agreement between the utility and the staff of the Georgia Public Service Commission.

The public interest advocacy staff of the PSC last month had recommended that commissioners reject Georgia Power’s request for an accounting change that would have spread the money over an 18-month period from July 2009 through December 2010 to boost its return on equity.

The money had been set aside in a reserve account to mothball old equipment. The utility said it needed the money because it projected its profit margin through next year would dip below 10.25 percent, the minimum allowed by the PSC. A higher return would be more attractive to investors and allow the company to borrow at better rates.

Georgia Power said it hoped to get the accounting change instead of asking for a base rate increase of its customers during a recession. It could file for an increase if its returns fall below 10.25 percent.

Under a new agreement struck last week, which commissioners could vote on as early as Thursday, the utility could take up to $108 million this year, as long as margins stayed below 9.75 percent. Georgia Power could take up to $216 million, next year, assuming margins of less than 10.15 percent.

The amount also would be reduced if the company filed for a rate increase before July 1, 2010.

A Georgia Power spokesperson said the company had no comment on the agreement.