Atlanta Gas Light wants a $54 million rate hike, which could add about $3 to the cost customers pay for the pipes that bring them natural gas, regardless of which marketer they use.
The company filed its request with the state Public Service Commission Monday afternoon, delivering 10 boxes full of binders to the PSC's Atlanta office. Any increase granted would take effect this fall.
The request is the company’s second largest ever and is based on rising operating expenses and declining revenues from the state’s dragging economy, AGL said.
It's also part of a looming double whammy for utility customers. As The Atlanta Journal-Constitution reported last week, Georgia Power is preparing a massive rate increase request of its own -- possibly as much as $800 million -- also based in part on revenues that it didn't collect when the economy and utility sales turned south. The electric company will file in July.
Atlanta Gas Light builds, operates and maintains the pipes that deliver gas from retail marketers. Part of AGL Resources, which has gas utilities in six states, the company has more than 1.5 residential and commercial customers in Georgia.
Customers pay Atlanta Gas Light through their bills from retail gas marketers. The AGL portion of those bills runs roughly $21.76 per month for households, the company says. The proposed rate hike would take that to $24.62.
"Over the past 5 years, we have taken aggressive steps to control costs and manage our utility expenses," company president Suzanne Sitherwood said in a Monday statement. "We deferred this necessary step as long as we could, but it is important that utilities stay financially sound, particularly in a difficult economy."
Atlanta Gas Light hasn’t had a rate increase since 1993, although it has seen a steady rise in other revenue sources.
Its last attempt was in 2004, when it asked for a $29 million hike. The PSC initially cut its revenues instead. In the end it kept rates where they were and froze them for five more years.
The company slashed costs in response, laying off workers and sending its call center to India, for instance.
But the recession undermined those efforts, the company said. Atlanta Gas Light earned significantly below its allowed returns in 2008 and 2009, as gas usage and the number of gas customers fell.
About $18 million of AGL's requested hike would go to covering operating costs and boosting its allowed return on its investments.
Another $13 million would fund a program of service improvements AGL calls "Customer First." The program continues some existings initiatives -- including repatriating the call center -- and expands others, like rebates and vouchers to help customers buy or repair gas-burning appliances.
The rest of the rate hike comes from proposed policy changes. The biggest would require it to pay AGL Resources for back-office savings the Georgia utility would derive from the parent's acquisitions of other companies.
The PSC will review the rate request for six months, with any increase going into effect in November.
Critics are sharpening their knives. The consumer group Georgia Watch plans to intervene in the case.
Director Angela Speir Phelps, a former PSC member, said Monday the company is exaggerating its woes, particularly by citing its 17-year stint without a rate increase.
"It's completely disingenuous," said Speir Phelps. "It's insulting to ratepayers who know better when they open their bills and know that their bills have gone up."
Speir said the company has increased revenues from new or expanded add-on fees even while its rates have remained steady.
AGL Resources has repeatedly cited one of those fees, the Georgia pipeline replacement fee, as a key revenue source, when describing earnings from its entire gas distribution operations.
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