PSC votes to keep Georgia Power rates steady, but relief may not last long

PSC Vice Chairman Tim Echols, one of two commissioners running for reelection this year, said the move to “freeze” rates now “shows that we’re listening to ratepayers, and we’re doing all we can to protect them.”

But Echols justified the higher bills customers have faced, arguing the state’s economic performance “would not have been possible without the investments that our ratepayers made in our energy system.”

In a statement, Georgia Power CEO Kim Greene thanked the PSC for voting for the rate deal and said the move was a “great result for customers.” Greene said the move is balancing the “mutual benefits of extraordinary economic growth among all stakeholders and helping to ensure that we remain equipped to continue supporting growth in this state.”

The upshot is Georgia Power will no longer file a request to adjust its rates this month as scheduled.

In hearings last week, the utility said if it had filed a “rate case” as planned, it would likely have included a request to raise rates again. Higher interest rates, inflation and the enormous investments the company has made have all increased the company’s costs, Georgia Power’s Chief Financial Officer Aaron Abramovitz said.

Opponents of the deal had few issues with keeping rates steady. But they argued canceling the “rate case” now allows the company to skirt a thorough examination of its finances, just as it embarks on a historic expansion of its electric infrastructure.

According to Georgia Power’s latest annual report, the company expects to spend at least $34 billion through 2029 to help pay for new power plants and other infrastructure. That spending is overwhelmingly driven by the need to serve data centers and other “large load” customers flocking to Georgia.

Details on the power generation mix the utility will lean on to meet demand are expected soon, but new oil and gas-burning units are likely to factor heavily into its plans. Burning gas and other fossil fuels produces greenhouse gas emissions, worsening global warming.

Abe Scarr, energy and utilities program director for the Georgia Public Interest Research Group, said that by forgoing a rate case, the PSC is “not doing its job of oversight.”

“Once again, Georgia Power customers will be left holding the bag,” he said.

Earlier this year, the commission approved changes to Georgia Power’s billing rules that allow it to charge data centers for infrastructure they require for service, while adding enhanced monitoring of data center contracts. The utility and the PSC have repeatedly said they believe those guardrails are sufficient to keep data center costs from being passed to residential customers.

But critics are skeptical and say the rules give Georgia Power too much leeway.

“Every day Georgians cannot be on the hook for Georgia Power’s data center spending spree,” Bob Sherrier, an attorney for the Southern Environmental Law Center, said in a statement. “The next three years are very consequential for the electric grid and deserve much more scrutiny than occurred here.”

The commission’s vote to approve the deal was not a surprise.

In May, Georgia Power and the PSC’s public interest staff announced they’d reached a handshake agreement to keep the company’s current rates and earnings structure in place for three more years. Other manufacturing and utility groups had endorsed the deal, too.

Some commissioners had also spoken publicly in support of the deal before the vote, a move that upset consumer advocacy and environmental groups, who argued their remarks showed bias. Ultimately, PSC staff and the commissioners involved — Chairman Jason Shaw, Echols and McDonald — said their actions did not breach state rules or require them to recuse themselves.

The deal came together with two of the all-Republican commission’s five members vying to keep their seats in elections this year.

Echols will face Democrat Alicia Johnson in November. Commissioner Fitz Johnson will square off with the winner of a runoff between Democrats Keisha Sean Waites and Peter Hubbard.

Customers’ rates have been the key issue so far in those races. Gov. Brian Kemp has hailed the deal as a win for consumers.

Critics of the deal argued the move to keep rates steady was timed to allow incumbents Johnson and Echols to dodge a vote on yet another potential rate increase. PSC commissioners have denied that the upcoming general elections had any bearing on moving to freeze rates now.

As part of the approved deal, Georgia Power will make its request to recover storm costs between Feb. 1 and July 1 next year.

As of March, those costs totaled $862 million, according to testimony filed by company executives. The largest chunk of that balance comes from Hurricane Helene, which the company has called the most destructive storm in its history.

A separate proceeding on the company’s outstanding tab for fuel used in its power plants is also set to kick off next February.

Last week, Georgia Power’s Abramovitz testified that, based on the company’s current forecast, the utility’s fuel and storm costs may not actually push bills up. In fact, he said, customers could actually see rates reduced. For months, the company has vowed that the influx of revenue it expects to see from data centers will put “downward” pressure on other customers’ rates.

But critics of the utility say it has promised rate relief in the past, while showing little evidence it delivered the savings.

Editor’s note: This story has been updated to correct details about Commissioner McDonald’s motion concerning Georgia Power’s earnings band.