Georgia Power request tops $1 billion

Georgia Power wants to raise rates by $1.02 billion over 26 months starting in January, eventually pushing up a typical family’s power bill by nearly $18 per month.

The phased increase would start with a $615 million hike in January, adding $10.88 to a typical monthly residential bill, or about 10 percent. Five smaller increases would follow, the last in February 2013.

The company laid out its request Thursday in a filing to the state Public Service Commission, which will hold hearings in coming months before a vote Dec. 21.

The increases would be on top of special charges already approved by the PSC to help Georgia Power pay for two new nuclear reactors at Plant Vogtle. Those charges will add about $1.30 to bills next year, with that amount growing to about $9 a month in 2017.

In the new filing, the company also asked the PSC for two key changes in the rate-changing process. Those changes would be used to implement the phased rate hikes in the basic rate request, and would dramatically change the way rate increases are handled in the future.

The company wants to be able to add costs to its rate base without going through a full, six-month rate case. It’s proposing that it be allowed to create a new kind of surcharge on bills, one that could grow after a shorter review than now required.

Georgia Power is also asking the PSC to allow it to adjust rates up or down twice a year, based on whether earnings are too low or too high. The PSC would have 60 days to review the adjustments, compared to the six months now allowed to review rate increase requests.

Georgia Power said the new mechanisms would stave off the kind of base rate increase requested in Thursday’s filing, smooth out future prices and make energy costs more predictable.

“It helps customers,” said Georgia Power comptroller Ann Daiss, in a briefing for The Atlanta Journal-Constitition and other media outlets. “One of the benefits is that you don’t end up like this. You shouldn’t ever have this size of rate case again. It will be more timely, more gradual.”

Georgia Power said its current rates are 14.5 percent below the national average for residential and commercial combined, and 7 percent below the Southeast average.

The giant utility’s proposals drew immediate criticism, however.

“It’s unprecedented and it’s unreasonable,” said Angela Speir, a former PSC member who now heads the consumer watchdog group Georgia Watch.

“Rates should never be increased without a thorough review,” Speir said. “What’s the PSC there for?”

The company said its phased rate increase request is needed to enable it to recoup investments in environmental controls, transmission lines and other capital projects, and to earn an adequate return.

Daiss said those investments were all approved as necessary by the PSC, in earlier rulings. The company’s capital expenditures also came as the economy turned south, keeping revenue and profit lower than expected when Georgia Power got its last rate increase, in 2007.

Daiss said the company proposed the six-step phased increase to avoid asking for $1 billion in new revenue all at once.

“We know this is a big deal,” she said.

After the initial increase in the rate increase request, the later hikes would be done through the two new surcharges and by expanding two existing surcharges, one for environmental control costs and one for energy efficiency spending.

Georgia Power last raised rates three years ago, with the typical bill going up about $5 per month.

But a series of separate fuel hikes have also pushed up electric bills. Since 2007, fuel hikes have added about $13 to the typical residential monthly bill.

A number of organizations are poised to intervene in the case, including Georgia Watch. AARP also quickly announced its intention to take part, asking the commission to hold hearings around the state.

“Our economy is slowly recovering, but people are still out of work and still struggling,” said AARP spokesman Will Phillips. “There has never been a more critical time to take a close look at proposals such as this, and determine what’s fair and what’s not.”

Georgia Power’s Plan

Date of increase amount effect on residential bill*

Jan. 2011 $615 million $10.88

Jan. 2012 $140 million $2.39

Feb. 2012 $101 million $1.68