Two months ago, the typical residential customer's Georgia Power bill jumped an average of $14 per month -- or $175 per year -- thanks to a double whammy of regulator-approved hikes that kicked in Jan. 1.
Now Georgia Power wants to cut those bills by about 64 cents per month, or $7.68 per year. The company filed for a reduction in its fuel charges Tuesday.
Small as the cut may seem, the filing is a notable departure for Georgia Power, which has been raising fuel charges at least annually for more than a decade and hasn't cut them in 14 years. Rising fuel charges have been the single biggest driver behind the rise in Georgia Power's electric bills in recent years.
The cut also comes as fuel prices for automobiles are jumping.
Georgia Power said it is proposing the $43 million annual cut because its costs for fueling its electric-generating plants dropped.
The current charge, approved a year ago, assumed higher natural gas costs than materialized: New supplies of natural gas in shale rock, along with recession-depressed industrial demand, drove natural gas costs lower than the company predicted when it set the charge.
The fuel charge is intended to be a pass-through, with the company earning no profit on it. Collections from customers are supposed to roughly match what Georgia Power spends to buy coal, natural gas and nuclear fuel for its plants.
For years, the utility's estimates of those costs fell short, creating a growing deficit that swelled fuel charges even further, as the company set rates it said would both pay for fuel in the future and pay itself back for the fuel it had purchased in the past.
The deficit nevertheless swelled from $87 million in 2001 to nearly $900 million by 2006. The company then found a problem with its cost models. The shortfall will stand at $289 million by May and at zero by February 2013, according to the company's latest predictions.
Public Service Commission public hearings on Georgia Power's fuel request are scheduled for May 9 and 10, with a final decision expected May 24. The new rate would begin June 1.
