Atlanta Gas Light requests additional surcharge

Residential customers would pay 95 cents more each month and small businesses an extra $2.85 a month to Atlanta Gas Light Co. if the Georgia Public Service Commission approves a proposed surcharge addition.

The utility wants to expand capacity of its pipelines in metro Atlanta and liquefied natural gas storage facilities to meet projected future demand and to improve service reliability under a $400 million, 10-year project.

AGL filed its request Friday.

Residential customers already pay a $1.95 monthly fee and small businesses $5.85 per month for a pipeline replacement program started in 1998. It is now scheduled to run to 2013 after the project was granted an extension by the PSC.

If the new fee is approved by a majority of the Georgia PSC's commissioners, residential customers will have to pay $2.90 each month in surcharges starting in October, while small businesses will be required to pay $8.70 a month.

Consumer advocates typically don't favor surcharges.

They "can create a system that fails to match expenses with corresponding revenues," said Angela Speir Phelps, a former Georgia PSC commissioner. Phelps now works as senior director for Georgia Watch, a consumer advocacy group in the state.

Utilities maintain that the surcharge provides cost and revenue certainty.

Consumer advocates say surcharges can lead to overcharges, and to excessive earnings for the utility. Surcharges like that proposed by AGL insulate some company revenues from the PSC's strictest scrutiny, they say.

The cost of projects like AGL's should be rolled into the company's general rates, which get more detailed oversight, they add. The PSC staff reviews rates to make sure a monopoly utility's earnings don't get out of line.

AGL said that, according to a report by the American Gas Association, 22 utilities in 11 states already have infrastructure surcharges, or they have them pending.

AGL President Suzanne Sitherwood said it's a good time to undertake the project because the cost to borrow and the cost of construction are both relatively low.

She said with commodity rates for natural gas lower lately, "the overall impact on customers may be largely offset."