Negotiations over Georgia Power’s rate hikes appear to stall

Credit: Natrice Miller / Natrice.Miller@ajc.com

Credit: Natrice Miller / Natrice.Miller@ajc.com

Company has requested a $2.9 billion rate increase over the next three years

Georgia Power and staff for state utility regulators appear to be in a stalemate over the company’s request to raise its electricity rates, people with knowledge of the negotiations tell The Atlanta Journal-Constitution.

The development adds fresh uncertainty near the end of a high-stakes, months-long case which could affect how much the company’s 2.7 million customers pay for electricity for years to come.

The roadblock comes less than two weeks before the Georgia Public Service Commission (PSC) is set to take a critical vote on whether to approve or adjust the $2.9 billion rate increase the company has requested to take effect over the next three years. If Georgia Power’s plan were approved, the new rates would raise the typical household’s annual electric bill by nearly $200 over the next three years, with the largest increase taking effect after Jan. 1.

The lack of an agreement is not unheard of, but it opens the door to a host of scenarios, including the PSC ordering a stripped down rate adjustment, instead of the comprehensive, three-year investment plan the company has requested, one of the people with knowledge of the confidential negotiations, told the AJC. Those new rates could remain in place until the company requests a new set of hearings on a different rate plan.

The settlement discussions are currently confidential, though details could emerge publicly in the coming days.

Asked to confirm whether talks had stalled, Georgia Power spokesman Jacob Hawkins said, “While we will not comment on any type of confidential settlement discussions, we are continuing to actively work through the regulatory process in our 2022 Rate Request.”

Still, the chasm between the parties was apparent in their final arguments submitted to the PSC this week.

In a scathing brief filed with the commission Thursday, PSC staff attorneys argued the grid investments the company has used to justify the rate increase aren’t needed and would burden ratepayers. Staff also called Georgia Power’s requested return from those investments — otherwise known as profits — excessive compared to what other regulated utilities have been granted.

“Georgia Power Company’s request is unprecedented, as will be the impact on its customers if the request is granted,” the brief said. “Staff’s proposal appropriately balances the interests of Georgia Power and its customers by allowing the Company the ability to earn a fair return while avoiding the rate shock that will occur if the Commission blesses the Company’s draconian proposal.”

In their own brief, attorneys for Georgia Power, called staff’s recommendations “unacceptable” and said they ignored the challenges presented by the COVID-19 pandemic, inflation, supply chain disruptions and more. Staff’s proposed plan calls for the company to recover roughly $530 million from its customers over the next three years, about one-fifth the $2.9 billion Georgia Power wants.

“When considering the past three years, many of the recommendations made by parties in this case would harm customers by upsetting the well-designed and balanced regulatory structure currently in place, and ultimately undermine the financial health and integrity of Georgia Power,” the company’s brief said.

While the lack of a settlement framework between Georgia Power and the PSC’s public interest advocacy staff before the final vote is not unprecedented, it is unusual.

In 2019, when the commission approved a roughly $1.8 billion rate increase, PSC staff and the company also failed to reach an agreement. Instead, Georgia Power and several of the intervening parties in the case reached a separate agreement, which was later approved with some tweaks by the commission.

On Friday, PSC staff distributed another alternative proposal to the other parties in the current rate proceedings. According to a document viewed by the AJC and verified by a person with knowledge of the negotiations, that plan would allow Georgia Power to recover roughly $1.2 billion from customers over the next three years. That’s less than half of what the company has proposed, but more than double the amount recommended by PSC staff in its initial plan.

It was not immediately clear whether any intervening parties — or Georgia Power — had accepted that plan.

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