Georgia Power and Georgia Public Service Commission (PSC) staff have reached a tentative agreement to raise customers’ rates dramatically as soon as June 1 to cover the cost of the coal, gas and nuclear fuel used in its power plants.
According to the framework filed Thursday, Georgia Power appears likely to receive most of what it asked for in its initial “fuel cost recovery” request filed February 28.
That request sought to pass along a tab to customers of anywhere between $2.1 billion and $2.6 billion, to be collected through rate increases. If approved by the PSC, the company previously estimated the average customer’s bill could go up $17 to $23 per month as a result, starting June 1.
Under this week’s new agreement, Georgia Power and PSC’s regulatory staff have agreed to shave $7 million off the sum the company is seeking to collect. But that reduction, equal to less than 1% of the company’s total ask, will do little to soften the blow to customers, who already pay some of the steepest electricity bills in the nation, according to federal data.
There is a chance that the final rate increase may not be quite as large as initially projected. According to the framework, Georgia Power is required to file a revised estimate of its future fuel expenditures by April 24 based on a “more recent natural gas price forecast.” Since natural gas prices have fallen lately from their pandemic-era highs, that could tamp down the rate hike, but the precise impact on bills is not yet known.
The PSC — the five-member elected body that regulates the utility — will have the final say on whether to approve the rate increase or adjust it further. Hearings on the company’s fuel request will begin in early May and the commission is set to take a final vote on the new rates on May 16.
Since Georgia Power does not earn profits on fuel expenses, utility regulators have traditionally allowed those costs to be passed on to customers with little adjustment.
Georgia Power spokesman Jacob Hawkins attributed the enormous size of its proposed rate increase to sky-high global fuel prices. The company has said natural gas prices nearly tripled between 2020 and 2022. Coal prices also rose during the thick of the COVID-19 pandemic.
“At Georgia Power, we understand that energy costs are an important part of every family’s and business’ budget,” Hawkins said. “That’s why we work every day to run our business efficiently, keep rates as affordable as possible and proactively take measures to protect customers from rising costs ...”
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
This rate increase comes on the heels of another major hike approved just over four months ago by the PSC.
That plan allows Georgia Power to collect $1.8 billion more from its customers over the next three years. The company said the increase was needed to pay for transmission upgrades and to allow it to maintain reliable service.
As a result, the average Georgia Power customer is already paying about $4 a month more for electricity than they were last year. Larger, additional rate hikes will take effect in both 2024 and 2025, but the monthly impact of those on customer bills is not yet known.
Environmental groups and consumer advocates have criticized Georgia Power and the PSC for not doing enough to tamp down electricity costs.
“The Public Service Commission can do more to help customers and we hope that they will,” said Jennifer Whitfield, a senior attorney at the Southern Environmental Law Center.
Even more rate hikes are likely later this year to pay for the cost of the two new nuclear reactors nearing completion at Plant Vogtle that are more than five years behind schedule.
Georgia Power customers have been paying for Vogtle’s construction in their bills every month for years and the company is expected to soon ask the PSC to pass along even more of the cost to its ratepayers.
The average Georgia Power customer will have paid nearly $913 in their monthly bills for Vogtle construction by the end of this year, according to witness testimony delivered to the PSC.
As soon as Unit 3 enters commercial service, another $3.78 rate increase approved by the PSC will begin hitting customers’ monthly bills, Georgia Power estimates. Additional hikes could follow, with the exact amount to be determined by the commission in hearings expected to begin later this year.
Georgia Power bills are rising. Here’s why
2022 rate case
- January 1: The average ratepayer’s bill increased by nearly $4 per month.
- January 2024 and January 2025: More rate hikes kick in; exact amounts TBD.
2023 fuel case
- June 1: Monthly bills could jump by roughly $17 to $23 per month
Plant Vogtle construction costs
- May or June: Estimated monthly increase of $3.78 to take effect when Vogtle Unit 3 begins commercial operation.
- Late 2023 and 2024: Additional Vogtle costs could enter rates; exact amounts TBD.
