Georgia Power proposes $10 a month rate hike

By Mary Landers, Savannah Now

Georgia Power is seeking to increase customer rates by approximately 7% in 2020.

As outlined in the company’s filing with the Georgia Public Service Commission late last week, the typical residential customer using 1,000 kilowatt-hours per month would see an increase of almost $10 per month or $120 per year on their bill. A final decision by the five-member elected PSC is expected in December.

In the filing, the company highlights nearly $18 billion in recent and future investments being made to improve the reliability and resiliency of the state’s electrical system and to comply with federal regulations. The company is also requesting to rebuild its storm restoration fund after more than 50 severe weather events have impacted its network in recent years, including Hurricanes Michael, Irma, and Matthew, and Ice Storm Pax. These storms not only depleted the storm restoration fund but they also created an additional $450 million in restoration costs not currently covered in rates. The filing also details costs of the company’s environmental compliance programs, including efforts to help protect air and water quality, particularly with its coal-fired power plants.

Consumers and environmental advocates called the size of the increase “significant.”

“We’re concerned about what this means for customers already struggling under the weight of high power bills,” Kurt Ebersbach, a senior attorney with the Southern Environmental Law Center, wrote in an email.

Better planning, especially around those coal-fired plants, could have avoided some of the increase, he wrote.

“For years, Georgia Power bet heavily on coal generation, which they told us was cheap and reliable,” he wrote. ”’We’re now seeing the full bill come due. We’ve spent billions on pollution controls only to see many coal units retire ahead of schedule because they can’t compete. We’ll now spend billions more cleaning up massive leaking coal ash ponds around the state. These are predictable outcomes of the Company’s over-reliance, until quite recently, on coal generation as its dominant method of power production.

Ebersbach also objected to some of the proposed increases being applied to the base customer charge.

“Increasing the customer charges causes more of a customer’s bill to be “fixed” – that is unresponsive to changes in electricity use,” he wrote. “This can significantly undermine the value of energy efficiency upgrades undertaken by customers and lengthen the payback period for onsite solar systems.”

Georgia Power spokesman John Kraft said the company’s basic service charge has increased only $2.50 over the past 30 years (from $7.50 to $10) and remains among the lowest of all electricity providers in the state.

Georgia Power also noted that its rates are comparatively low, at 16% below the national average. And for nearly 30 years, inflation has outpaced rate increases so that customers pay less today, and will pay less after the requested increase, than they paid in 1990 on an inflation-adjusted basis. Residential customers currently pay less than $1 more per month today than they did in 2011.

Georgia Power has not had a rate case filing since 2013. That case raised rates in 2014-2016. In 2016 the company worked out an agreement with the PSC to freeze rates for three years.

“We fully recognize that we are asking our customers to pay more for electricity, which is an essential service, and realize this can place a burden on our customers, especially those who are already financially challenged,” Georgia Power CEO Paul Bowers wrote in his filed testimony. “While we strive to be efficient and minimize any cost increase for customers, it has been six years since our last rate case and our current base rates are no longer sufficient to allow the Company to recover the costs necessary to continue providing safe, reliable electric service to our customers while maintaining high levels of customer service.

The current proposal seeks to expand the company’s suite of rate plans and improve its payment options, including adding a Pay-by-Day rate plan and eliminating fees associated with authorized payment locations and for paying by credit or debit card.

Liz Coyle, the executive director of Georgia Watch, said the proposed increase will be especially difficult for Georgians already struggling to make ends meet. Nearly 15 percent of Georgians and 24 percent of Savannahians live in poverty, according to the U.S. Census Bureau.

“Georgia Power’s proposal does include some relief for consumers, such as eliminating fees charged to customers to pay their bills, which for many can be as much as $6 a month,” Coyle wrote in an email. “Georgia Watch will be working with the Company and the Georgia Public Service Commission this fall during rate case hearings to ensure any rate increase approved is necessary to meet the state’s energy needs while minimizing the burden of the increase on low to moderate income consumers.”

The proposed rate hike doesn’t include any of the capital costs for the behind-schedule and over-budget expansion of the nuclear plant Vogtle. The latest cost estimate of $27.5 billion is nearly twice the initial estimate of $14 billion when the two additional reactors were approved in 2009. Georgia Power owns 45.7% the project. More rate hikes will follow this one, Ebersbach predicted.

“Considering the fact that the biggest cost driver underpinning the current proposed increase is approximately $1 billion in rate base assets added between 2013 and 2018 (with no Vogtle contribution), this current proposal is only the first big rate hike in the near future,” he wrote. “When the Vogtle units go into rate base (2022 and 2023 if the current schedule is met) that will mean more than $7 billion in new capital costs going into Georgia Power’s rate base. In that sense, the current proposal, painful as it is, is a mere harbinger of the pain to come.”