Georgia Power originally proposed a $1.46 billion rate hike for its 2.4 million residential and business customers. Georgia Power cut that amount by 40 percent after reaching an agreement in November with PSC staff, consumer advocates and others.
Photo: AJC file photo
Photo: AJC file photo

PSC approves Georgia Power rate increase

Georgia Power customers will see an increase in their bills next year, but the amount is much less than what the utility originally requested.

State utility regulators unanimously approved an $873 million rate hike at its Tuesday meeting. Residential consumers will pay an estimated $2.19 more in 2014 as a result.

That amount will increase another $3.61 in 2015 and another $2.96 in 2016. Businesses also will see an increase, but the amount varies per business class.

“We want a company that has the financial strength to make the necessary investments (to serve customers),” Kevin Greene, Georgia Power’s chief attorney, said at a recent hearing about the increase. “Finding that balance is always difficult.”

The utility originally proposed a $1.46 billion rate hike for its 2.4 million residential and business customers. Georgia Power cut that amount by 40 percent after reaching an agreement in November with PSC staff, consumer advocates and others.

“I think the profit margin is still higher than it needs to be,” said Liz Coyle, deputy director of the consumer rights group Georgia Watch, referring to the rate of return the PSC allows Georgia Power.

But, she said, “The agreement is generally beneficial to residential consumers here in Georgia.”

Georgia Watch was one of 11 groups that signed the agreement, along with manufacturers, retailers, environmental groups, MARTA and the U.S. Department of Defense and other federal agencies.

Sierra Club and the Association for Fairness in Ratemaking did not sign the agreement. The Sierra Club partnered with Georgia Watch to hold four public meetings in Savannah, Columbus, Gainesville and Athens about the rate increase.

“We are thankful that members of the PSC attended public meetings and carefully considered comments from citizens and organizations concerned about this rate increase,” said Seth Gunning, organizer with the Sierra Club’s Beyond Coal campaign. “But at the end of the day, customers will see another increase on their monthly bills to pay for expensive, obsolete coal plants while cheaper, cleaner options are on the table.”

Georgia Power said in June it needed to boost bills to pay for pollution equipment on its coal-burning power plants, as well as to add transmission lines and install smart grid technologies.

PSC Commissioner Stan Wise pointed out that much of the rate request was because of “environmental costs that come out of Washington and the war on coal.”

As a regulated monopoly, Georgia Power is allowed to recoup its capital costs from consumers plus earn a set profit. The utility originally requested a set rate of return of 11.5 percent.

The utility agreed to a reduced rate of return of 10.95 percent.

Georgia Power also agreed to withdraw a tariff that would have required additional fees from residential consumers who use solar panels to help reduce their own energy costs.

Renewable energy advocates argued that the tariff would offset any savings consumers get from using solar and perpetuates Georgia Power’s grip on solar growth.

“This decision will protect Georgia ratepayers’ right to invest in cost-saving solar energy going forward, which will continue to provide environmental benefits, cost savings and economic development for our state,” said Katie Ottenweller, head of the Southern Environmental Law Center’s solar initiative.

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