Proposed Georgia Power Settlement Will Benefit Consumers
| Tuesday, November 20, 2007 |
Contact: Bill Cloud
|
On June 29, 2007 Georgia Power Company, Georgia’s largest electric utility, filed for a base rate increase, citing Georgia’s growing needs and environmental compliance costs. Their proposed plan would have allowed them to collect an additional $1.629 billion, with residential consumers seeing average monthly increases of approximately $10.29 per month over a three-year term.
Georgia Power presented its case to the Public Service Commission during hearings held on October 1-3, 2007. Consumers’ Utility Counsel, Public Service Commission staff, and Interveners representing many interest groups, including large industrial and commercial customers, cross-examined Georgia Power and subsequently presented their cases to the Public Service Commission on November 5-7, 2007.
On November 16, 2007, Consumers’ Utility Counsel executed a proposed stipulation (settlement) that provides many benefits to Georgia’s ratepayers. This proposal was also signed by Georgia Power, the staff at the Public Service Commission, the Georgia Industrial Group, Georgia Traditional Manufacturers Association, the Georgia Municipal Association, Georgia Environmental Facilities Authority, and the Department of Defense.
After the required hearings and rebuttals, the Public Service Commission will render its final decision on December 20, 2007.
“While you rarely get everything you want,” says Joseph Doyle, Administrator of the Governor’s Office of Consumer Affairs, “we feel this settlement represents a fair outcome for all and is a good outcome for
Key elements of the settlement include:
1. The total increase in rates over the next three years (January 2008 to December 2010) will be $966 million versus the $1.629 billion requested by Georgia Power, a 59% reduction.
2. Georgia Power should have the funds to:
- Build the infrastructure needed to serve Georgia’s
anticipated growth;
- Come into compliance with all governmentally mandated
environmental laws;
- Fund nuclear decommissioning in a responsible manner; and
- Maintain its excellent credit rating.
3. Georgia Power’s target Return-on-Equity will stay at 11.25% (Georgia Power requested 12.50%). Should earnings exceed 12.25%, 2/3 will be refunded to customers and 1/3 will offset the cost of environmental compliance. Currently, 2/3 of excess earnings are to be refunded to customers and 1/3 is retained by Georgia Power.
4. This settlement provides ratepayers rate stability for three years. The average residential bill will increase ~$5.70 per month on January 1, 2008. Under Georgia Power’s original proposal, monthly residential bills would have increased $6.67 in January 2008; $2.93 in January 2009; and $0.69 in January 2010.
5. Consumers and small business owners will pay the same percent of all increases that they currently do. There was a lot of pressure to charge consumers a higher percent of these and all future increases. This is an extremely important win for Consumers’ Utility Counsel.
6. Georgia Power will incur environmental costs of $666 million over this three year plan. These costs are included in the rates noted above and will be shown on ratepayer’s monthly bills as an Environmental Cost Compliance Rider.
It is important to note that this is a Base Rate Case. Georgia Power can also request increases from time to time as the cost of fuel to generate electricity rises above what has been forecast. The next Base Rate Case will be filed on July 1, 2010, unless Georgia Power’s earnings fall below 10.25%.
*NOTE: On December 18, 2007, the Georgia Public Service Commission voted to adopt the stipulation signed by CUC, Georgia Power, the Commission Advocacy Staff and others. In addition, in early December 2007, Georgia Power revised its calculations and determined that under the stipulation the one time increase to the average residential consumer will be $5.23 per month, as opposed to its original estimate of $5.70 per month.