Georgia Power seeking 6.1% rate hike

Georgia Power customers, your monthly bill may go up about $8 next year.

The utility wants to raise what its residential and business customers pay by 6.1 percent, or $482 million, through 2016. In a filing to state regulators late Friday, the company said it needs the additional money to pay for pollution equipment on its coal-burning power plants, as well as to add transmission lines and install smart grid technologies.

It would be the latest in a string of rate hikes or construction-related fees since 2011, though falling fuel costs have partly offset those increases.

» CHART: History of Georgia Power rates

The Public Service Commission must approve Georgia Power’s request. It will vote in December after a series of hearings. Regulators typically approve the utility’s requests, but not necessarily for the full amount.

The utility wants to maintain its allowed profit margin of between 10.25 percent to 12.25 percent, with a set rate of return of 11.5 percent, according to documents filed late Friday with the U.S. Securities and Exchange Commission.

If approved, a “typical” residential monthly bill of 1,000 kilowatt hours would go up $7.84 a month, Georgia Power said.

“We will continue to invest what is required to deliver the world-class value our customers deserve and expect and to serve Georgia’s current and future energy needs,” Georgia Power chief executive Paul Bowers said in a statement.

Georgia Power and its parent, Atlanta-based Southern Co. have said for years that federal environmental regulations will drive up customer bills. The utility is spending $5 billion on pollution controls and other efforts to comply with rules to cut mercury and other toxins from its coal-burning power plants.

Environmental advocates say the rules will lead to cleaner air.

“Coal has gotten a free ride since the industrial revolution, and it’s been subsidized by our air, our water and our health,” said Colleen Kiernan, director of the Sierra Club’s Georgia Chapter.

PSC member Chuck Eaton said the request will get “a high level of scrutiny.”

“Whether you like it or not, the federal government has become increasingly hostile toward coal,” he added. “We’re having to add more environmental controls in and that costs money.”

The proposed increase is separate from the fee that customers are paying for Georgia Power’s Plant Vogtle expansion project near Waynesboro.

It also does not include what customers pay for fuel — such as natural gas and coal. The utility does not profit from that amount, which is set separately and dropped last year.

Georgia Power last asked to raise customer rates in 2010. That average increase of $14.50 a month hit customers bills in 2011, along with the Plant Vogtle fee. Subsequent smaller increases followed, as well as a $8-$10 drop in bills last year because of lower fuel costs.

Georgia Power says its customers pay about 10 to 15 percent less on their utility bills than the national average.

The 2011 rate increase was one of the biggest in company history, however.

The utility released its long-term electricity plan in January and at the time predicted “no significant impact” on customer bills in 2014 from costs related to closing coal and oil units, new environmental programs or efficiency efforts that cut demand.

Running power plants more efficiently and encouraging customers to save energy are other ways to reduce demand.

As a regulated monopoly, Georgia Power is allowed to recoup its capital costs from consumers plus earn a set profit. The utility must supply electricity to all 2.4 million residential and business customers in its designated territory and in exchange can recover the costs of building the power plants, transmission lines and other infrastructure.

Some of those power plants aren’t producing electricity all of the time but are needed during “peak” periods such as really hot summer days. State regulations call for Georgia Power to have about 15 percent excess capacity on its power grid, but the utility has nearly twice that amount.

“Georgia Power’s excessive energy reserve margin of more than 25 percent is … a substantial over-investment in capacity borne by Georgia ratepayers,” said Liz Coyle, deputy director of Georgia Watch, a consumer rights group. “We end up paying for those reserve margins.”

Environmental advocates have pushed the utility to add more renewable energy, especially solar. Georgia Power has resisted doing so, saying that renewable fuels are expensive and will drive up consumer bills.

“Rates are going up a lot,” Kiernan said. “Adding more solar is probably the best way to hedge against steeper increase because you know the fuel is going to be free, and you know you’re not going to have to spend millions on environmental controls.”

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