Georgia regulators OK hike to natural gas bills starting in January

Atlanta Gas Light rate increase follows Georgia Power bill hike

By Matt Kempner, The Atlanta Journal-Constitution

ATLANTA – First, elected state regulators approved a rate increase that will hit Georgia Power customers next month. Now, they’ve also OK’d a January hike in bills for 1.6 million Georgians who rely on natural gas.

The Georgia Public Service Commission on Thursday approved an increase for pipeline company Atlanta Gas Light, whose charges appear as a line item in the monthly customer bills of more than a dozen natural gas marketers. Typical residential customers will see a $2.54 monthly increase, or just over $30 a year, and about a 4% increase in the average total gas bill, according to AGL.

The decision came just two days after members of the PSC voted 4-1 to let Georgia Power charge its electricity customers higher rates and fees, which could boost bills for average residential customers by more than $175 a year. Both Georgia Power and AGL are owned by Atlanta-based Southern Company.

Georgia Power’s $1.77 billion approved increase, phased in over three years, dwarfs the $96 million hike AGL initially requested this summer, and the $65 million the PSC has now granted the pipeline company.

In both cases, the PSC’s own staff had been deeply critical of the companies’ proposed increases and urged publicly elected commissioners to vote against them. In the AGL case, the PSC staff had advised commissioners to cut — not increase — monthly charges.

AGL president Bryan Batson said in a press release that natural gas bills overall are sharply lower than a decade ago, even factoring in the latest rate hike.

In addition to AGL’s pipeline charges, customers pay natural gas marketers for the amount of natural gas used and sales tax. U.S. consumers have benefited from falling natural gas prices in recent years as the supply of natural gas rose.

AGL said the rate increase will allow it to cover earlier expenses, improve pipeline safety and comply with future government regulations. The pipeline company also said it will boost customer service, including faster responses to leak complaints, automatic reminders of upcoming appointments and shorter time windows for scheduled AGL visits.

PSC commissioner Chuck Eaton said in a press release that the unanimous decision by the five-member body “balances increased federal regulations, the capital investment required from a growing Georgia economy and ensures the company will make needed service improvements that customers will notice. All this while, keeping bills as low as possible for Georgians given added pressures on the company.”

PSC staffers argued that AGL had asked for an increase of unprecedented proportion, an inflated rate of return “out of step with national trends” and an inadequately supported boost in spending. They recommended a sharply lower profit rate than what AGL requested, which would remain above a national average for its industry. And they criticized AGL for contending customers should pay for cost increases tied to its parent company being acquired by Southern.

Staffers also objected to ratepayers being saddled with other expenses, including AGL executive and employee pay-for-performance incentives tied to company profits. They wrote in a filing that “there is an inherent conflict between achieving greater financial performance for shareholders and achieving lower rates for customers.”

PSC commissioner Tricia Pridemore voted for the changes but said during Thursday’s meeting that she thought it was $15 million too high and didn’t include as many customer improvements as it could have.

The PSC’s decision included an additional $1 million a year for a low-income energy assistance program, according to Liz Coyle, the executive director of consumer advocacy organization Georgia Watch.

AGL last filed for a traditional rate increase in 2010, when the PSC approved a $26.5 million increase, which represented a nearly 10% increase in residential rates, according to the PSC. In 2017, using a more streamlined review, the PSC granted an additional $20.3 million increase, which for residential customers amounted to about a 5% increase.

Last year, rates essentially remained the same but the company provided a total of $16.3 million in bill credits, primarily in July and October, to account for lowered costs due to federal tax law changes.