State Regulators Approve $900 Million Rate Hike for Georgia Power Customers

Dec 17, 2013

Credit Georgia Power

Georgia Power bills, once again, are going up.

The state Public Service Commission Tuesday approved a rate hike of $873 million over the next three years.

“All those in favor, say aye…Item R-5 passes unanimously,” said PSC Chairman Chuck Eaton.

After a phase-in period, Georgia Power's 2.4 million customers, on average, will be paying about $100 more annually than they are now.

The company says the extra funds are needed for infrastructure maintenance and complying with new, stricter clear air regulations.

It originally requested $1.46 billion, but last month, the power company reached a compromise deal with PSC staffers to lower the rate hike to $873 million.

Commissioner Doug Everett touted the fact consumer groups like Georgia Watch and the Southern Alliance for Clean Energy signed on to the compromise. 

“Shows me that it was a very fair deal and it’s one that everyone knew had to be made. Of course, nobody wants a rate hike…You’re taking this rate hike, half of it was mandated by the federal government,” said Everett, referencing ongoing efforts by the Environmental Protection Agency to cut down on air pollution from existing coal plants.

Many of the commissioners cited what they called a war on coal by the Obama Administration.

Commissioner Stan Wise said those who support the president’s agenda shouldn't complain about the rate hike. He used this analogy.

“It’s a little bit like supporting an increase in the minimum wage for fast food workers and then complaining your cheeseburger went up a dollar in price,” said Wise.

Seth Gunning of the Sierra Club framed it differently. He said rates are going up because the PSC is allowing Georgia Power to throw more customer money into dirty, inefficient power plants.

“Georgia Power’s over-reliance on fossil fuels - expensive fossil fuels like coal - is really what’s driving these rate increases,” said Gunning.

He also criticized the structure of the rate hike, given customers will be paying for new pollution controls before they’re actually completed.

“If the company believes it’s a good decision to invest in outdated fossil fuels like coal, they should bear the financial risk of making those capital investments upfront -- not utility customers,” said Gunning.

In addition to the Sierra Club, the senior advocacy group AARP opposed the rate hike, arguing Georgia Power shareholders, not ratepayers, should be absorbing more of the costs.

As part of the compromise deal, Georgia Power agreed to increase its low-income senior citizen discount, from a maximum of $14 per month to $18. The power company also agreed to toss out a proposed solar tariff and reduce slightly its required profit margin, from 11.15 percent to 10.95 percent.

“This agreement protects our must vulnerable citizens while keeping electric rates just and reasonable,” said Chairman Eaton.

Next month, bills will rise $2.19 per month. In 2015, customers will pay an additional $3.61 per month, and in 2016, an extra $2.96 per month. That’s a total rate hike of $8.76 per month, or $105.12 annually.

From 2007 to 2013, the average Georgia Power bill has increased by more than 30 percent, from $89.48 per month to $117.20 per month.