The Georgia Public Service Commission voted Tuesday to raise Georgia Power customer rates by about $1.8 billion over the next three years and allowed the company to continue making up to about 12% in annual profit.
The company had originally requested a $2.2 billion rate hike. The average Georgia Power household is expected to see its bill rise by about $6 per month next year. Bills will rise again 2-2.5% in 2021 and an additional 4.5-5% in 2022.
Rates, however, will not begin to change until 2021. Additionally, the base service charge — which customers pay no matter how much power they use and which the company had originally requested to raise nearly $8 over three years — will now only increase $4 over three years.
In this proceeding, the commission also decided how much profit Georgia Power should be allowed to make, which had been a sticking point in the rate case this year.
The motion, put forward by Commissioner Tim Echols, set the allowed return-on-equity at 10.5%, down from 10.95%. But based on its profit structure, the company can still technically earn up to 12% in profit, roughly unchanged from its current position.
That profit margin issue brought the rate case to a stalemate as different parties, including the commission’s own staff, argued the company didn’t need to continue earning that amount, particularly considering it makes more than the national average for regulated utilities, and it has earned more than its allowed profit percentage in four of the last five years.
Echols said a recent visit to the investment community in New York City crystalized for him that the company needed to continue making a similar level of profit.
“We’re not at war with the utility here in Georgia. There are other states that seem to be at war with utilities and having an aggressive posture. We want them to be successful,” he said. “We want them to serve our customers in an excellent way. We want their trucks to be new. We want the best apps. We want a high-quality grid, and that requires investment.”
“I want the company to be whole. But Wall Street’s not going to tell me what to do here in Georgia. New York is New York, and we’re down here,” said Commissioner Bubba McDonald, the sole dissenting vote. “We have a track record of a very conservative commission. The power company has done well under this commission. It’s a good company. One of the best-regulated utilities in my opinion,” he said.
“This is going to give the company some significant profit until it gets to the cap at the top of the [earnings] band. And I just disagree with that.”
The decision also attracted criticism from some advocates.
Brionté McCorkle, executive director of Georgia Conservation Voters, said the group is “extremely disappointed that the Public Service commissioners have voted against the interests of the people who voted for them.”
“It is clear that they are representing the interests of Georgia Power and not the millions of customers who will be stuck with higher bills because of the company’s poor decision-making,” she said.
On another note, Echols pointed out that his motion would be very beneficial for solar customers, who previously were forced to immediately sell energy generated from solar panels back to Georgia Power and then buy back energy at a higher rate when panels weren’t producing. The new motion will allow customers to offset their bills monthly based on total monthly solar production.
“The move that we made today in allowing them to have monthly netting will mean that they get to keep more money in their pockets,” he said.
Katie Chiles Ottenweller, southeast director at Vote Solar, agreed the move “opened the door for energy freedom, local jobs and hardworking Georgia families.”
Ottenweller was dismayed that a 5,000 customer cap was set on this new solar policy change, but said, “for now, Georgia families and businesses that invest in affordable, clean rooftop solar will be treated fairly on their electric bills.”