Georgia Power rate hike push to get public airing starting next month

Georgia Power rate hike push to get public airing starting next month

By Stanley Dunlap – Georgia Recorder

Business interests and consumer watchdog organizations are keeping a wary eye on Georgia Power’s push to sharply increase its customers’ cost of electricity over the next three years.

They can weigh in on the proposed three-year, $2.2 billion rate hike during this fall’s Georgia Public Service Commission hearings to consider the rate case that begins Sept. 30. Trade groups like the Georgia Restaurant Association and the Georgia Manufacturers Association and consumer advocate Georgia Watch are among those expected to have a say.

The Georgia chapter of the Sierra Club, MARTA, and retail grocery giant Kroger also want to join in the public debate that will play out through the end of the year, according to documents filed with state regulators.

Georgia Power’s plan would add about $16.48 a month to the bills of the average residential customer as it phases in the increase from 2020 to 2022.

The largest share of the increase is planned for 2020 when the average monthly residential bill increases to $9.85, or by 7%. The average bill rises by 7.5% for large businesses and 8.8% for small businesses.

The increase does not include the looming tab for the company’s troubled and over-budget Plant Vogtle nuclear expansion project when two new reactors are supposed to be online in 2022.

The restaurant association is asking Georgia Power and state regulators to consider the burden the charges could impose on an industry that employs 488,000 Georgians.

Most restaurants are run by small business owners operating on a thin margin, said Karen Bramer, the restaurant association’s CEO.

“A percent here and a percent there when the profit margin runs 3% to 6% can be very significant,” she said.

The state’s largest electricity provider proposes to use the new revenue to replenish $450 million in storm damage expenses related to disasters like Tropical Storm Irma and Hurricane Michael, a company statement said.

It is also trying to recover environmental costs related to closing 29 coal ash ponds and meeting other air and water pollution requirements. And Georgia Power plans to spend an additional $1.3 billion on work on the electric grid over the next several years.

Georgia Power’s plan is to phase in the residential base rate increases from $10 to $17.95 by 2022.

“This will help to mitigate the impacts of the design change to residential customers,” Larry Legg, director of Pricing and Rates for Georgia Power, said in submitted testimony. “After this change, our basic service charge will be more in line with our costs, although it will still be lower than most Electric Member Cooperatives’ basic service charges in Georgia.”

A chief concern among consumer advocates is that the rate hike will land hardest on people who already find it difficult to pay their bills.

To help mitigate that concern, Georgia Power is offering to waive a $1.50 fee charged when a bill is paid in person as well as some other changes, said Georgia Watch Executive Director Liz Coyle.

Her group expects to work with the utility provider and commission to make sure any rate increase is justified.

“Our experience is that the company files for a requested increase that is significantly more than they know the commission will authorize,” she said.

A crucial question is finding the right balance between the base rate versus a price change that depends on how much electricity people use, Coyle said.

“If they don’t increase the fixed charged that much, they’ll still raise the cost of the kilowatt hour, so at the end of the day the additional increase on the customer’s bill is the $10,” Coyle said.

The commission’s staff is busy gathering as much information as it can ahead of the first hearing in September, PSC Chairman Bubba McDonald said.

The commission is setting aside seven days for hearings over the next few months. A decision will likely be made in mid-December, McDonald said.

“The buck stops here,” he said. “We have a fiduciary responsibility by law to these regulated utilities, but we also have a challenge of consumer protection. We have the balance of scales in each hand.”

What to know:

Georgia Power is proposing a rate change that will increase the average residential customer’s bill by 7% in 2020 or about $9.85 a month. It’s the first step in a plan to phase in a $16.48 hike by 2022.

Georgia Public Service Commission is hosting hearings on the case on Sept. 30, Oct. 1 and  2, Nov. 4 and 5 and Nov. 25 and 26.

Copyright © 2019 Georgia Recorder

Source: Georgia Recorder