Regulators balk at Georgia Power’s request for steep rate hike
Georgia Power President Paul Bowers, center, answers questions during the Sept. 30 rate case hearing before the Public Service Commission. Contributed
Georgia Public Service Commission staffers are pushing back on a steep rate increase that Georgia Power had requested start as soon as January.
The staff on Friday endorsed a one-time $2 base rate increase starting in 2021, instead of Georgia Power’s plan to incrementally raise the fee from $10 to $17.95 over the next three years. The staff recommends the regulatory commission approve a $1 billion rate hike, or roughly half of what the utility provider is requesting over the next three years.
The report calls into question some of the financial projections Georgia Power used to validate its proposed $2.2 billion plan.
Friday’s filings by the commission staff, which represents the public in matters before the utility commission, is standard whenever a utility provider proposes a new rate or fee increase.
Both sides will begin negotiations, but the final say will come from the elected five-member commission, which is scheduled to vote on the case Dec. 17.
However, the staff favors a smaller base rate increase since it’s a fee charged no matter how much electricity is used.
The staff does support a higher per kilowatt fee as part of the rate plan, which is a fairer approach since it’s based on consumption, something customers can control, said Tom Krause, spokesman for the Public Service Commission.
Consumer and environmental watchdog advocacy groups have spoken out against a sharp base rate increase because of the impact it could have on people living on fixed incomes.
The staff report also questions Georgia Power’s projections for environmental cost cleanup and regulations, including its plan to recoup $525 million from customers to help close 29 coal ash ponds.
Georgia Power also intends to use the new revenue to help replenish $450 million into its storm recovery fund and to help cover $1.3 billion in infrastructure upgrades.
The company has been heavily criticized by groups like the Sierra Club of Georgia for a lack of transparency when it comes to coal ash cleanup costs.
Atlanta-based nonprofit Georgia Watch, a consumer watchdog agency, supports getting more details about some of the company’s broader financial projections.
“Obviously, from our standpoint we would agree with staff that rate increases should not be overly speculative in terms of the company’s actual revenue requirements,” Georgia Watch Executive Director Liz Coyle said.
The commission staff suggests waiting until annual reports are filed before determining the environmental costs.
“The timing and level of certain environmental costs, such as plant retirements and environmental retrofits … could be affected if any revisions are made to environmental regulations, including the compliance date,” the report said.
The staff also recommends lowering Georgia Power’s profit margin baseline from about 11% to just above 9%, which is closer to the national average for utility providers.
At the next set of hearings set to begin early next month, advocates, public service commissioners and others will be able to question the staff’s recommendations.
Georgia Power can request a rebuttal hearing later in November.
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