GA Power Customers To See 10% Rate Hike

From AJC:

Georgia Power rates will go up $844 million over the next three years, according to a deal reached Friday.

Signed by the company, the litigating staff of the state Public Service Commission and a group of large retailers, the deal would push up the typical residential customer's bill by an average of $15 per month by 2013.

The bulk of that, or $10.86 per month, would take effect Jan. 1.

The five-member PSC still has to approve the settlement, and will vote on it Dec. 21.

With both the commission staff and an unusually united group of major retailers on board, the settlement deal is almost certain to pass.

“We feel this agreement will allow us to continue to provide reliable service while meeting environmental requirements and keeping rates below the national average," said company spokesman Jeff Wilson, in an e-mailed statement.

The company agreed to an 11.15 percent return on equity, which is less than both the 11.95 percent return it requested in July and the 11.25 percent return it earns now.

The deal does not include two utility-proposed changes in the way the company would raise its charges in the future.

Georgia Power had asked for a more automatic way of raising rates, which would have allowed it to adjust its charges up annually if it wasn't making its allowed returns. The proposal was part of what united retailers against the rate hike request.

The company also wanted the PSC to allow it to begin charging customers for new power plants and other investments without having a formal rate case.

Neither proposal made it into the settlement deal. But the staff and retailers did agree to a provision allowing Georgia Power to raise rates inside of the settlement's three-year life, if its returns fall too low.

Any such increase would be temporary and would expire in 2014.

A final round of hearings in the case will still go forward on Dec.1, three weeks before the commission's vote.

Several parties who had participated in the case aren't named on the settlement, including the Georgia Industrial Group, the consumer group Georgia Watch, and senior advocacy organization AARP.

None could be reached for comment after Georgia Power released the settlement news Friday evening.

In a statement, the company said business customers will see an increase of about 7 percent to 8.7 percent in their bills, while residential rates would rise 10 percent.

Georgia Power had originally asked for more than $1.1 billion in new revenue, along with the proposed overhaul of the rate-making process.

The company said it needed the money to recoup its investments in power transmission and distribution systems, a new natural gas power plant near Smyrna and for environmental controls required by state and federal law.

Georgia Power said it has invested almost $5 billion since its last rate request was approved three years ago.

The company's retail rates were about 7 percent below the Southeast average and 14 percent below the national average, according to the latest available numbers from the federal Energy Information Administration in December 2009.