The rate hike approved Tuesday is to pay for the cost of the coal, gas and nuclear fuel used in Georgia Power’s power plants.
When gas prices rose after Russia invaded Ukraine in 2022, Georgia Power’s rates did not keep pace. As a result, the company said in testimony and hearings that it had accumulated a fuel tab of almost $2.2 billion that it requested customers pay for. On top of that, the company said it needed to collect $4.5 billion from ratepayers to cover its expected fuel expenses over the next two years.
Tuesday’s vote took less than five minutes and the outcome was largely expected.
Weeks ago, Georgia Power and the PSC’s public-interest advocacy staff agreed to a framework that allowed the company to pass on nearly all of its fuel costs to ratepayers, but spread out the collection of its outstanding bill over three years, instead of the usual two. Since Georgia Power is not allowed to earn profits on fuel expenses, the PSC has typically allowed the company to collect those costs with few adjustments.
On Tuesday, the five commissioners — all Republicans — voted to approve that plan with only one change: Chairman Tricia Pridemore proposed increasing the Income Qualified Senior Citizen Fuel Discount to $9.50 per month, after the company had proposed raising it from $6 to $8. Pridemore’s motion passed unanimously, meaning eligible seniors can now access bill discounts totaling $33.50 each month.
In recent hearings, environmental groups, consumer advocates and manufacturing interest groups had called on the commission to take action to protect ratepayers, either by extending the time period for the fuel expense collection or by requiring the company to assume responsibility for a small share of the fuel costs.
But the PSC and its staff ultimately rejected those requests and argued that the commission was legally bound to allow the company to collect all reasonable fuel expenses from customers.
On Tuesday, Commissioner Bubba McDonald said approving the rate increase was “very painful for all of us.”
“But it’s a reality,” he added later. “We’ve got to face the issue. We owe the bill and we’ve got to pay it.”
Environmental groups criticized the increase, which they said will heap more financial strain on Georgians who are already struggling to make ends meet. Last year, roughly 10% of Georgia Power’s customers were disconnected at some point for not paying their electricity bill, according to recent testimony by Jennifer Whitfield, a senior attorney at the Southern Environmental Law Center.
“I think the commission has the authority and the duty to ensure that people can pay their bills,” said Codi Norred, the executive director of Georgia Interfaith Power and Light (GIPL), a nonprofit that works with religious organizations on environmental issues. “If they can’t pay their bills, then the rates are not just and reasonable.”
In a statement, Georgia Power spokesman Jacob Hawkins said the company recognizes that energy costs are a concern for family budgets and promised the company would work to “keep rates as affordable as possible and proactively take measures to protect customers from rising costs.”
Hawkins added that Tuesday’s approval “helps spread out these additional fuel costs over three years and adds relief for income-qualified senior citizens through an increased discount program.”
In addition to the two rate hikes that have been approved so far this year, several other significant increases are expected in the coming months and years.
The PSC has signed off on two, 4.5% increases in the company’s base rates, which are set to take effect in both 2024 and 2025.
More of the costs from building Georgia Power’s two, long-delayed and over-budget nuclear reactors at Plant Vogtle near Augusta could also hit customers’ bills soon. As soon as Unit 3 enters commercial service — which the company has said will happen by the end of June — Georgia Power estimates that another monthly rate increase of roughly $3.78 will roll into monthly bills.
More hikes could follow, with the exact amount to be determined by the PSC after fuel is loaded into Unit 3′s twin, Unit 4. The company has projected fuel load at Unit 4 could occur anytime between July and October.
Breaking down Georgia Power’s rate increases
June 1: The average Georgia Power customer using 1,000 kilowatt-hours of electricity each month will see their monthly bill jump by around $16.
May or June: Monthly bills will increase by $3.78 when Vogtle Unit 3 begins commercial operation, Georgia Power estimates.
Late 2023 or 2024: Additional Vogtle costs could raise rates; exact amounts TBD.
January 2024 and January 2025: Additional rate hikes of 4.5% kick in both years; exact monthly bill impacts TBD.