Lawsuit Against Gas Surcharge Dismissed on Technicality

By Jonathan Shapiro
May 21, 2010

A Fulton County judge has dismissed a lawsuit against Atlanta Gas Light alleging it increased customer rates by up to $400 million without facing the regulatory scrutiny required by law.

The seniors’ advocacy group AARP sued on grounds that it was denied discovery rights during AGL’s request proceeding before the Public Service Commission. AGL argued – and the PSC ultimately agreed – that it had no legal obligation to provide discovery, since AGL was seeking approval of a surcharge, rather than a formal rate increase.

Georgia Watch and Common Cause, in support of AARP’s appeal, jointly filed an amicus brief arguing the request for the new surcharge was tantamount to a rate increase.

“Denial of discovery puts consumers at risk for unjust rate increases,” said Georgia Watch executive director Angela Speir Phelps. “If you can’t get behind the numbers to question the legitimacy of the utility’s request through discovery – then ratepayers are greatly disadvantaged.”

Fulton Judge T. Jackson Bedford admitted the PSC approval process might be flawed, but threw out AARP’s lawsuit on technical grounds.
The PSC-approved surcharge means 1.5 million AGL customers will pay an additional $200-$400 million on their utility bills over the next 15 years.

The rate increase stems from a 2009 decision by the Public Service Commission that allowed AGL to extend and repurpose its pipeline replacement program (PRP) surcharge.

Originally implemented to repair corroded pipeline in 1998, the PRP surcharge was scheduled to expire in 2013. The PSC, however, allowed AGL to push back that date to 2025, repurpose the funds to brand new capital projects, and impose an entirely new surcharge.
Because the process involved a surcharge, as opposed to a formal rate increase, AGL was able to sidestep much of the oversight required by law. During the PSC hearings, AARP repeatedly requested consumer- minded cost breakdowns, but AGL simply denied access to the necessary documents.

Making matters worse, the Consumers’ Utility Counsel, the state agency charged with advocating for residential ratepayers in cases before the PSC, was defunded in September 2008 due to budget cuts.

Speir Phelps said the entire approval process lacked fairness and transparency.

“The elimination of the Consumers’ Utility Counsel and the denial of discovery rights at the PSC undoubtedly created an unlevel playing field for the average citizen,” said Speir Phelps. “The most frustrating part is that AGL still claims it hasn’t technically raised rates…which is absolutely disingenuous.”

To add insult to injury, AGL is currently seeking approval of an additional rate increase of $54 million per year. If approved by the PSC, the rate hike would take effect this fall.