Georgia Power made a presentation before state regulators Monday, reiterating its argument for increasing power rates for customers.
The company doubled down on an original request for about $2.2 billion more over three years, or roughly $10 more per typical residential customer per month after some pushback on the proposal from advocates, regulators’ staff and other interested parties.
At issue was the tension between ratepayers who testified about their concerns over having to pay more on their bills every month and the utility, which said it needs more money to cover increasing costs.
“I think any rational person would prefer, given the choice, to pay less than more, but on balance, I think customers would support that we have provided high-quality service over the years, recognizing that costs have gone up,” David Poroch, Georgia Power’s chief financial officer, said to regulators.
Among the costs he referenced, he cited the “need to recover the storm costs that we have incurred, the need to fulfill our responsibilities under federal and state environmental regulations. I think [customers] recognize those costs have gone up and we must recover those costs from our customers as a cost-based, rate-regulated utility.”
Those testifying in the public comment portion of the hearing expressed a different tone about the increase.
“I find it difficult to pay my $100-a-month Georgia Power bill now,” said Gloria Hayes, a senior living on a fixed income. “This increase is going to be too much. And if it is not necessary, I pray you reject it.”
South Fulton City Councilman Khalid Kamau said he’s heard from constituents worried about paying higher power bills.
“Simply put, my residents, especially my seniors on fixed income, cannot afford this hike,” he said.
He said concerned constituents call him trying to understand why there’s a need for the increase: “It’s so hard to explain why a company that’s making billions of dollars needs money from residents.”
Georgia Power’s parent company Southern Company made more than $2 billion in profit in 2018. As a regulated utility, it is allowed a certain percentage of profit by the Georgia Public Service Commission. That return on equity level is also up for consideration in this rate increase request.
In its evaluation of Georgia Power’s request, the commission’s staff suggested lowering the percentage from nearly 11% to about 9%. The company took strong issue with this idea Monday.
Poroch, the utility’s chief financial officer, said the company needs to continue making a comparable amount of profit to maintain efficiencies and maintain the company’s credit rating.
He said if the company’s profit were “slashed,” it would “threaten the financial health of Georgia Power.”
He argued the business would become less efficient, its credit rating would likely be downgraded, mutual funds and investment pools might not purchase Southern Company stock and access to capital would be much more difficult.
“We have a compact with our customers to provide high-quality, reliable electric service at a fair price for them,” he said. “But at the same time deliver a reasonable return for our investors. And I think that we’ve demonstrated over decades that we’ve been able to maintain that balance.”