State regulators approve $1.8 billion Georgia Power rate hike
Georgia Power can recover $7.7 million it spent on COVID-19 safety expenses, but the company drew criticism over the message that it sends if it sticks customers with the tab when small businesses are absorbing similar costs. Pixabay
Georgia Power customers can expect to pay steeper electric bills over the next several years, with some new charges kicking in next month.
State regulators approved the increase Tuesday over protests from critics who complained the rate hike will disproportionately harm seniors and low-income workers.
Starting next year, residential customers will pay about $71 more on average for coal-ash cleanup and other fees. Over the course of the three-year agreement, the average residential bill is set to increase by about 11% by 2022, according to the utility. Residential customers will pay $2 more on their monthly basic service charge in 2021 and $2 more in 2022.
When Georgia Power initiated the request with the state Public Service Commission in the summer, it asked for the fixed monthly fee for residential customers to gradually rise from $10 to $17.95 from 2020 to 2022.
The higher monthly rates fuel a $1.8 billion rate hike, which is roughly $400 million less than Georgia Power initially said it needed for 2020 to 2022. Environmental groups and consumer advocates criticized the commission for passing a fee hike they say is not in the best interest of the public. Georgia Power’s 2.5 million customers will pay higher bills and have less control over those bills, according to the Southern Environmental Law Center.
And although the monthly base rates remain the same next year, customers will see a new line item charge on their bills in 2020. That’s when an estimated $300 million in fees will be added to pay to clean up toxic ash waste it created at its coal-fired plants.
“By increasing the fixed monthly fee that all customers pay by 40%, the PSC guaranteed that Georgia Power customers will see their monthly bills go up regardless of their energy usage,” Jessica Morehead, interim director of the Sierra Club Georgia chapter, said in a statement. “Additionally, customers will also be required to cover a multi-billion-dollar bill for cleaning up the toxic coal ash Georgia Power is storing in unsafe pits, leaking toxic pollutants into our groundwater, across the state — despite Georgia Power’s woefully inadequate explanation for how it plans to use that money.”
And for PSC Chairman Lauren “Bubba” McDonald, the new plan fails to factor in costs likely to be passed along to ratepayers within the next couple of years: the projected $800 million to $1 billion for the over budget and overdue Plant Vogtle expansion.
McDonald’s motion didn’t get support from other commissioners on his push for a $3 basic service charge increase in 2022. The commission staff recommended a $2 increase in 2022, which some consumer advocacy groups supported.
“My motion would have set the tone for what we’re going to be expecting in three years when Vogtle 3 and 4 (reactors) will come in line,” McDonald said following Tuesday’s hearing. “And of course, my other concern was (the plan) allows the company too much profit. Profit is not a dirty word in my vocabulary, but I think (it) was excessive.”
The new rate plan aligns closely with an agreement that Georgia Power, several large commercial interests, MARTA and the City of Atlanta signed last week.
Commission Vice Chairman Tim Echols asked his colleagues to approve most of Georgia Power’s agreement with the major electricity users. The rate design allows the company to continue to provide strong electric service without hurting the utility’s credit rating, he said.
“Maintaining Georgia Power’s financial integrity is important to me and the economy of the state,” he said shortly before voting. “It’s certainly important to ratepayers who depend on the company to have access to capital markets at cheaper rates. This time, we are also complying with federal environmental regulations and investing in transmission and distribution systems.”
The fixed-monthly fee has been a point of contention since Georgia Power first filed the rate hike request in June.
Consumer and environmental advocacy groups argued that higher costs should be more centered on electricity consumption and not a mandatory minimum fee that can’t be reduced through conservation.
“Customers who earn a fixed or lower-income suffer the most from high electric bills, and allowing Georgia Power to increase mandatory fees only makes that burden even greater,” said Codi Norred, program director for Georgia Interfaith Power & Light.
The new agreement includes plans to identify more ways to assist lower income residents to go along with a low-income senior discount that’s already in place.
Echol’s successfully pushed for $8 million to be set aside for electrical vehicle stations.
“Rate cases can be very long and complicated processes,” Commissioner Chuck Eaton said in a news release. “It can be difficult to synthesize it down to a motion. I felt we did a great job today in balancing a lot of interests.”
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